Debt Collector

Definition - What does Debt Collector mean?

A debt collector is a person or a company that engages in the collection of outstanding debts to make a profit. Debt collectors are usually companies that are hired by creditors, such as credit card companies, to pursue the funds owed by the people who were lent the money in the first place. Debt collectors profit by receiving a cut of the money they recover.

Justipedia explains Debt Collector

Often, people who take on debt fail to pay it back during the scheduled intervals. When this happens, it can become a problem for the creditors who loaned out the money in the first place. The reason is because the creditor stops receiving the payments owed, and then tracking down these payments or attempting to get people to pay them becomes a whole separate issue. So, in these circumstance, the creditor will often hire a debt collector to do this work. It then becomes the job of the debt collector to try to recover the missing funds. The debt collector must comply with all the laws in this area as it tries to track down the debt.

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