Debt Collection in the USA

The author presents and analyses the options available to the creditor if the debtor fails to pay the debt. The judicial path in which the debts are collected within the state-organised enforcement system is usually more costly and time consuming for the creditor. The author determines that debt collection in the USA is primarily perceived as an activity taking place outside of the court. In principle, the creditor will first try to obtain payment with non-judicial rem- edies, which are: (1) psychological pressure on the debtor and influencing the assessment of the creditworthiness of the debtor, (2) debt collection and debt buying industry (3) secured creditor’s remedy of self-help repossession. The exclusion of the state’s involvement is the most significant element, which is common to all private debt collection methods.

Key words: private debt collection, psychological pressure, credit scoring, debt collection agencies, self-help repossession, secured claims.