What is debt?

Definition of debt

Debt is money that is owed by one party to another.

If you take out a loan from the bank, that is a debt because you owe that money back to the bank.

If you are in business and one of your customers owes you some money, that is also a debt that your customer owes to your business.

A business that owes money to another business is called a debtor.

A business that is owed money by another business is called a creditor.