A debtor is a natural or legal person who owes money or another obligation to someone else. For example, a person who borrows money from a bank is a debtor. A creditor is a natural or legal person to whom a debt is owed. In the example of a debtor being the person who borrows money from a bank, the bank is the creditor of the person who has borrowed money. The creditor gives something of value to the debtor and the debtor agrees to repay the creditor according to their agreement.
Creditors have several alternatives or methods to collecting debts.
Secured transactions are transactions in which the debtor gives the creditor a special right, or lien, on the debtor's property in order to assure payment of the debt. The property may be real property or personal property. The creditor is then a secured creditor as opposed to an unsecured creditor. Mortgage foreclosure proceedings vary widely among the states. A lien is a special right in a debtor's property that the law gives to a creditor in order to assure payment of a debt.