Legal Dictionary of Pakistan

consumer debt

A debt incurred by someone primarily for a personal, family, or household purpose "What are 'consumer' debts? Section 101(8) defines a consumer debt as follows: 'consumer debt means debt incurred by an individual primarily for a personal, family, or household purpose.' The touchstone is the debtor's use of the money. The nature of the collateral, the business of the creditor and the form of the loan are all irrelevant. A loan of $25,000 from a Credit Union to pay for a child's education is a consumer debt, but the same loan used to finance the opening of an accounting business is not a consumer debt. This is so irrespective of the nature of the collateral put up for the debt." David G. Epstein et al., Bankruptcy § 7-45, at 579 (1993).