Introduction

Contributed by Ian Macdonald and Andrea Highman and current to 1 September 2005

A debt occurs when one person (the debtor) owes money to another (the creditor). Debts may or may not be part of a contracted agreement, may include money owed to friends and family, and include interest charges. A debt is different to a fine, which is a penalty imposed by a legal authority. Not all debts can be included in a petition for bankruptcy.