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 as a home or business or in the event a borrower is completely broke, they secured themselves with jail time.
In this contemporary time, using the traditional collection methods and law enforcement, debt collection has been within the domain of bailiffs and court officials. This system has over a period of time failed to meet the exigency of the 21st Century and proven to be ineffective. This is because apart from being slow and punitive, the system destroys business relationships and in some instances makes former business associates to be sworn enemies.
Experience has shown that it is better to maintain business relations with a debtor who is genuinely willing to pay its debts than to endlessly harass the debtor to seek business elsewhere. Hence, apart from the need to be knowledgeable in the traditional collection methods, the 21st Century debt recovery expert must be skilled in modern dispute resolution mechanisms. He must not be interested in debt recovery alone but debt recovery and maintaining or even furthering the business relationship between the creditor and its debtors. This can be achieved by knowing the creditor's business and that of its debtors and using new technological advancements and proven strategies to record higher collection rates while reducing cost of collection.
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