Debt-to-Income Ratio

Definition from Nolo’s Plain-English Law DictionaryThe percentage of a person's monthly gross income that is spent on paying debts, such as housing and credit card payments. Banks and lenders use this ratio to decide how much money (and on what terms)...


In general, someone who owes an obligation to someone else. Most commonly, an obligation to pay money. In specific contexts:

1. In bankruptcy law, someone who files a voluntary bankruptcy petition, or against whom an involuntary bankruptcy...

Debtor and Creditor

debtor and creditor: an overview

Debtor-creditor law governs situations where one party is unable to pay a monetary debt to another. There are three types of creditors. First are those who have a lien against a particular piece of property. This...

Deductible Business Expense

An expense which must be an 1) ordinary and 2) necessary 3) expense 4) that was paid or incurred during the taxable year 5) in carrying on 6) a trade or business activity, in order to be deductible. See 26 U.S.C. § 162(a).


Borrowers default when they breach a term of their loan agreement. For example, a home owner might go into default by failing to make scheduled mortgage payments.

This entry refers to defaults in a debtor and creditor context. For defaults in a...



In a corporation, a director is a person, appointed or elected by the shareholders to sit on the board of directors. Directors have authority to implement corporate policy, and act by voting to pass board resolutions. Directors act as agents...

Disregarding the Corporate Entity


See Piercing the corporate veil

Dissolution of Corporation


The ending of a corporation, either voluntarily by filing a notice of dissolution with the Secretary of State or as ordered by a court after a vote of the shareholders, or involuntarily through government action as a result of failure to pay...

Distribution of Profits


The dispensing of profits amongst partners of a partnership, members of a Limited Liability Company, or employees in a company, as per terms outlined in a profit-sharing agreement.

See alsoPartnershipLimited Liability Company


Definition from Nolo’s Plain-English Law DictionaryThe disposition or sale of an asset by a company or government entity. It may be voluntary or ordered by a court.

Definition provided by Nolo’s Plain-English Law Dictionary.