In the context of debt collection, the process of pursuing payment of debts owed by individuals or businesses is defined as A collection agency, often known as a debt collector, is a business that specialises in the recovery of unpaid debts. The vast majority of collection companies act as agents for creditors, collecting debts in exchange for a fee or a percentage of the total amount outstanding.
Since the beginning of time, there has been a need to collect debt. In fact, debt collection is older than the history of money itself, having existed inside prior systems based on trading. Debt collection may be traced back to ancient civilizations, beginning with the Sumerians about 3000 BC. In these cultures, if a loan was owing that could not be paid back, the debtor and the debtor's spouse, children, or slaves were placed into "debt slavery" until the creditor recouped losses by the physical work of the debtor and his or her family members. The repayment of debts was controlled by rigorous standards under Babylonian Law, which included a number of fundamental debtor rights.
The debtor is the individual who is responsible for the bill or debt. For a variety of reasons, debtors may refuse to pay (default), including an absence of sufficient planning or overcommitment on their part; an unforeseen event, such as the loss of a job or medical concerns; a dispute or disagreeing over the debt and what is being billed for; or dishonesty on the part of both creditor and the debtor. There are two types of debtors: individuals and entities, such as corporations. The collection of consumer debt is subject to more stringent regulations than the collection of company debt is subject to.