Debtor refers to anyone who owes money to another. Debtors can include individuals, companies, governments, and financial institutions. Whether a person owes money to a relative or a country owes money to another country, they all fall under the same blanket description.A debtor can also be referred to as a borrower or mortgagor. These terms are often used within legal documents such as real estate contracts and promissory notes. Mortgagor is commonly used within mortgage notes, while borrower is typically used with IOU notes and unsecured loans. Regardless of the noun, each references the person or entity responsible for repayment of debt.Long-term unemployment combined with economic recession left many debtors unable to comply with loan obligations. In 2010, more than 1 million property owners lost their home to foreclosure and over 1.5 million people petitioned courts for bankruptcy protection. This is an increase of nearly 15-percent ove ppi reclaim r the previous year.Mortgagors faced with foreclosure often file personal bankruptcy to prevent lenders from repossessing their home. This can be effective on a short-term basis, but rarely offers a long-term solution.Filing bankruptcy is a serious decision that can present severe ramifications. This debt relief option is costly, time-consuming, and stressful. Although there are times when bankruptcy is a viable option, it is wise to seek out alternative options when possible.Before doing anything, debtors should take time to research the Bankruptcy Abuse Prevention and Consumer Protection Act. These new bankruptcy laws took effect in 2005 and forever changed the way legal proceedings are handled.Within the United States there are six bankruptcy chapters. Personal bankruptcy includes Chapter 7 and Chapter 13. Chapter 7 involves liquidating property to repay creditor debts. Unresolved balances are written-off and discharged through the court.