Ace the PACE 2025 – Unleash Your Paralegal Superpowers!

A debtor is defined as a person or entity that owes money, goods, or services to another party, often referred to as the creditor. This definition encompasses various forms of debt, including loans, credit, or any obligation to provide goods or services. Understanding this concept is crucial in financial and legal contexts, as it lays the foundation for transactions, contracts, and the rights of creditors in recovering owed amounts.

The other choices do not accurately capture the definition of a debtor. For instance, someone receiving money from a creditor is not a debtor; they are, in fact, a creditor when providing money or resources. A legal representative of a deceased person's estate deals with the estate's debts and assets but is not classified as a debtor themselves unless they owe money directly. Finally, someone holding a mortgage on a property is typically a creditor concerning the loan and is not categorized as a debtor, even though they might owe money on that property if they have taken out a loan.