The Debt Recovery Process
Debt collection is quite possibly one of the oldest professions known to man. For as long as there has been money, people have borrowed and lent it. When people have failed to repay their loans, they have gone into debt. Debt recovery has always been a part of the monetary system of practically every country and will remain so for the foreseeable future.
Some would even argue that it is older than money itself because debt can be incurred in a barter system as well. That way, people might have been accruing debt and employing debt collectors before money even existed. Some of the oldest laws about debt come from Babylonian law.
Babylonian law dictates the parameters for contracts and commercial interactions. In commerce, usually one was expected to pay in kind. Contracts were typically written to stipulate what sort of currency was expected. However, when a creditor demanded payment, the law said the debtor had to be allowed to pay in produce. This way, the debt was not too onerous. If the debtor did not have crops or currency, the creditor was required to accept goods. The debt was secured based on the person of the debtor. Creditors, however, were not allowed to take a debtor’s grain.
Debtors were also allowed to nominate their wives, children, or slaves as mancipium to work off the debt. Debtors were able to pledge their property in the contract. It was typical for them to pledge fields, crop yields, or houses. The law was somewhat lenient if crops were pledged. If the crop failed, then the payment had to be deferred interest-free for one year.
A debt recovery lawyer can help you navigate the sometimes cruel world of collecting debts. While modern laws are nowhere near as harsh as Babylonian law, you can still be confused about the ramifications of uncollected debts. If you are a creditor, you might want to know what rights you have to collect a debt. You want to know how far you are allowed to pursue this issue and who you are allowed to hire.
If you are a debtor, an attorney can help protect you from legal action from your creditors. Also, an attorney can inform you of your rights. As a debtor, you will want to know how far your creditor is allowed to pursue your debt. Who is he or she allowed to hire? What are the limits of his power in this situation? You will probably want to negotiate for better terms for repayment. You cannot do that without great knowledge of the law. An attorney will have that knowledge you need.
One of the major problems with debt collection is how confusing the law is. When debtor’s prisons were thankfully done away with, creditors had very little recourse for collecting debts. For debts secured against property, called collateral, the creditor can take the collateral. Creditors and legislatures began to craft laws that would allow creditors to collect money they are owed.