What is Debt?

Every time when a person or a company asks for a loan he will end up in debt until he pays it off according to the agreement. If the borrower can’t pay off his debt then bankruptcy is sure to follow. If this scenario happens then the borrower didn’t fully understood his capabilities of payment or he took out a bigger loan then he could handle. For example if a corporation applies for a loan of half a million £ for a real estate to expand, and the creditor accepts the terms then the corporation will be in debt of a half a million £ plus the interest until he pays I off or the contract reaches maturity day. Another word for debt is liability.