How is debt best described?

Debt is best described as an obligation of repayment owed by a debtor. This concept captures the essence of debt, which involves borrowing money or using credit with the promise to repay the lender in the future, typically with interest. Understanding debt in this way highlights its nature as a financial liability, where the borrower is required to meet specific repayment terms according to the agreement made at the time of borrowing. This definition also underscores the relationship between creditors and debtors, where the debtor has a legal and financial responsibility to fulfill the repayment obligations. Recognizing debt in this manner is crucial for effective financial management and literacy, as it informs how individuals and businesses approach borrowing and repayment strategies.