Collections

Debt collection has been around as long as there has been debt and is older than the history of money itself, as it existed within earlier systems based on bartering. Debt collection goes back to the ancient civilizations, starting in Sumer in 3000 BC. In these civilizations if a debt was owed that could not be paid back, the debtor and the debtor’s spouse, children or servants were forced into “debt slavery” until the creditor recouped losses via their physical labor. Under Babylonian Law, strict guidelines governed the repayment of debts, including several basic debtor protections.

In some societies debts would be carried over into subsequent generations and debt slavery would continue, but some early societies provided for periodic debt forgiveness such as a jubilees or would set a time limit on a debt.

Both the Bible and Quran issue stern restrictions regarding how much interest to charge on a loan. The Abrahamic religions discouraged lending and prohibited creditors from collecting interest on debts owed. By the Middle Ages, laws came into being to deal specifically with debtors. If creditors were unable to collect a debt they could take the debtor to court and obtain a judgment against the debtor. This resulted in either the bailiff of the court going to the house of debtor and collecting goods in lieu of the debt, or the debtor being remitted to debtor’s prison until the debtor’s family could pay off the debt or until the creditor forgave it.

In occupied territories of the Roman Empire, tax collectors were frequently associated with extortion, greed, and abuse of power.

In medieval England, a catchpole, formerly a freelance tax collector, was a legal official, working for the bailiff, responsible for collecting debts, using often coercive methods.

During the Great Depression of the 1930s in the United States, large financial institutions relied heavily upon foreclosure to collect outstanding mortgage debts, which gained an overwhelmingly negative public perception.