In financial terms, who is described as a creditor?

In financial terms, a creditor is defined as a business or individual to whom a debt is owed. This means that a creditor extends credit to a borrower and expects repayment of that loan or debt under specified terms. The relationship between the creditor and the debtor is fundamental to financial transactions, as it establishes the obligation of the debtor to repay the borrowed funds, which may incur interest and additional fees.

In contrast, the other options describe different roles in financial scenarios. A person acquiring a loan is actually the debtor or borrower who owes money to the creditor. An individual filing for bankruptcy is seeking relief from creditors due to an inability to repay debts, which reflects desperation rather than a role of extending credit. A person managing a trust does not inherently have a creditor-debtor relationship; instead, a trust typically manages assets for the benefit of beneficiaries, which is a separate financial function altogether. Understanding these roles clarifies why being a creditor is specifically linked to the party to whom a debt is owed.