legal creditor
/ˈliːɡəl ˈkrɛdɪtər/ · leg·al cred·i·tor
noun
- A creditor who is recognized by law as having a valid claim against a debtor, often with priority in bankruptcy or insolvency proceedings. In the Chapter 11 case, the court listed the bank as a legal creditor entitled to be paid before unsecured claimants.
- Any party to whom a legal obligation to pay a debt is owed, as distinguished from informal or moral obligations. The landlord became a legal creditor when the tenant failed to pay rent for three months.
Synonyms
Did you know? The term "legal creditor" is explicitly defined in the United States Bankruptcy Code, where it determines who may receive distributions from a debtor's estate.