Creditors have several alternatives or methods to collecting debts. A demand to pay the debt Self-help Demand for payment . Creditors may contact the debtor by letter asking or demanding that the debtor make payment. For example, a creditor may use this method when a debtor fails to pay a credit card bill. However, because debtors may not respond to letters, creditors often transfer delinquent accounts to debt collectors.
Debt collectors are businesses involved in the professional collection of debt.
Some of their tactics such as sending dunning letters and making repeated telephone calls have raised legal concerns. A number of statutes regulate the activity of debt collectors and the collection of consumer debt. This remedy to collecting a debt entitles the creditor to privately vindicate their rights against the debtor by taking the debtor's property. For example, assume a consumer buys an automobile on credit from X Corporation and defaults on the loan. In many states, X Corporation has the right to repossess the automobile provided that the repossession can take place without a breach of peace.