Debt Collection

What does Debt Collection mean?

The term debt collection is associated with the field of finance and banking. It means the collection of receivables from a debtor if these are still open or have not been settled within the payment period.

The debt collection can be done by the creditor himself, a lawyer or a professional debt collection agency. Usually, the first step in collecting debts is to try to settle the outstanding debt by out-of-court means. If this is unsuccessful, the application for a court order for payment initiates the judicial dunning procedure, which ends with the issue of an enforcement order or a legal dispute.

In logistics, the term debt collection can have a further meaning i.e. goods are only delivered against (cash) payment.