Video: Debtors, Creditors, and Guarantors

In this lesson, Nick Palazzolo, CPA, breaks down the roles and relationships of debtors, creditors, and guarantors within credit transactions. He paints a clear picture of the dynamic interactions between these parties, beginning with common scenarios such as taking out loans for vehicles or mortgages, and covering the responsibilities associated with each role. Nick deftly illustrates how a debtor takes on the obligation to repay borrowed money, while the creditor extends the credit, awaiting repayment with potential interest and fees. He also unravels the concept of a guarantor, explaining how they can secure a loan by agreeing to cover the obligations should the debtor fail to repay. Through practical examples and connecting them to broader financial concepts, this lesson provides a comprehensive understanding of these key financial relationships.