The Role Of Debt Recovery In The Credit Economy Of The 21st Century

John N. Bellows, a Detroit classics teacher, wrote in 1842 that lenders have just as much of an interest to sell to consumers as consumers have in purchasing a service or product on credit. He stated that the lender must bear his share of inherent risk that is associated with the new expansion of what was quickly becoming the "credit economy". The expected need for more persons to engage in business for self sustenance and the obvious increase in both local and international trade to sustain the micro and macro economy of respective nations in the 21st Century has given Bellows' postulation more credence today than in the 19th Century.

More than ever before, markets in the 21st Century are much more competitive. The recent global economic recession has even escalated the situation. In order to weather the storm and survive in business, entrepreneurs have to be more aggressive and innovative. To acquire new markets and expand their businesses, there is an inevitable need for goods and services to be sold on credit to prospective or existing customers. Ironically, the survival of these businesses is largely dependent on their ability to recover the debts associated with such expansion. Today, the entire economy of most countries is dependent on credit. Hence, the survival of the 21st Century's world economy is dependent on effective debt recovery.

Early debt collectors employed aggressive techniques to collect debt payments and sanctioned bullying threats of lawsuits and even jail time. While today defaulting on a debt is not a crime and therefore not punishable by imprisonment, back then it was common for a lawyer to utilize a "writ of attachment" - a lien to satisfy a debt - secured by physical property such...