What is the role of a debtor in a gap contract context?

In the context of a gap contract, the role of a debtor primarily involves fulfilling loan obligations or making payments for purchased goods. A gap contract, often related to automobile financing, is designed to cover the difference between what a borrower owes on a vehicle and its actual cash value in the event of a total loss, such as theft or an accident. The debtor, in this case, is responsible for making the necessary payments on the loan taken out to purchase the vehicle.

When a borrower purchases a car, they often finance it through a loan, thus becoming a debtor. If the vehicle is totaled, the insurance company generally pays out based on the car's market value, which may be less than the amount owed on the loan. The purpose of the gap coverage is to protect that borrower, ensuring they are not left with additional debt after the payout. Therefore, ensuring loan obligations are met is central to the debtor's responsibilities in relation to a gap contract.