DEBT is anything owed, especially a sum of money that one person owes to another. A person who owes a debt is called a debtor, and the one to whom it is owed is the creditor. If the debtor is unwilling or unable to pay the debt, the creditor may bring suit to recover the money. If the court finds that the debt is owed, and if the debtor fails to pay, the creditor may appeal to the sheriff for an execution of judgment. This gives the creditor the right to seize enough property of the debtor to pay the debt and the costs of the process. But there are exceptions as to what may be seized. This law varies in different states, provinces, and territories.

FINANCE, money matters; the science or conduct of monetary business or affairs. Ex. The millionaire boasted of his skill in finance.
The system by which money matters, such as of a nation, state, or corporation, are managed. Management of government revenue and expenditure is called public finance.
REFINANCING, to finance again or anew, as by arranging new terms, or borrowing to settle notes.

MAKING LOANS. Banks receive funds from people who do not need them at the moment and lend them to those who do. For example, a couple may want to buy a house but have only part of the purchase price saved. If one or both of them have a good job and seem likely to repay a loan, a bank may lend them the additional money they need. To make the loan, the bank uses funds other people have deposited. A major obligation of a bank is to permit depositors to withdraw their funds upon demand. But no bank has enough cash readily available to satisfy its depositors if all were to demand their funds at the same time. Banks know from experience, however, that such a demand-called a run-rarely occurs. If people are confident they can withdraw their funds at any time, they will leave them on deposit at the bank until needed. As a result, banks can loan and invest a large percentage of the funds deposited with them. In most countries, the government limits the percentage of a bank's funds that can be used for loans and investment. The government simultaneously sets a minimum percentage that must be kept on reserve for meeting withdrawals.