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.

Bookkeeping and tax tips

If you check this box, we’ll send you business tips tailored for landlords. If you’d like more general small business tips, leave it unchecked.

We are committed to keeping your information safe. Read our Privacy Policy to find out more.

Related Definitions

Are you an accountant or bookkeeper?

Find out more about FreeAgent for your practice.