Any person to whom a debt is owed may try to collect the debt by contacting the debtor directly or by seizing and selling the debtor’s property to recover the debt. The creditor can also sue the debtor or employ the services of a debt collection agency to recover the debt. A creditor is any person who offers credit to a debtor or a lending company to whom a debt is owed. Any person or party assigned to recover a debt cannot be regarded as a creditor. Contrary, a debtor is a natural person whose responsibility is to settle a debt and the term is not applicable to any artificial person such as a corporation. In this context, a debtor is referred to as a consumer as the debt is incurred through the purchase of services. A debt is a consumer’s responsibility to pay money as a result of services purchased for family or personal use. It includes loan meant for purchase of goods and services meant for household purposes or for family use as well as loans for medical bills and education. However, it does not include funds owed without payment for goods and services such as fines, alimony and unpaid taxes. Funds used in maintaining the insurance on collateral is not a debt. Debt collector refers to a person or party who attempts to collect funds owed to another person. A creditor becomes a debt collector if he uses a name other than his in recovering a debt. Thus, such a creditor acts as a third party in the collection of debt. Employees of a debt collection agency as well as a firm that collects outstanding rents for owners of real estate are also referred to as debt collectors. The term is also applicable to a law firm that attempts to recover consumer debts owed to its clients by communicating with the debtor. Thus, a debt collector is a third party who collects or tries to collect funds due to another. Collection Agency A collection agency is a company employed by a creditor to recover an outstanding debt. Moreover, a collection agency may be a subsidiary or division of the lending company. A collection agency receives a part of the debt or funds it recovers from a debtor or it may buy the debt at a lower price from the creditor and keeps the entire owed funds that it recovers. However, it has no right to seize any asset of a debtor or to threaten a debtor to settle a debt unless it has defeated the in a lawsuit against the debtor. The use of unfair practices such as threats, abuses and harassments in the collection of debts led to the establishment of Fair Debt Collection Practices Act (FDCPA). Fair Debt Collection Practices Act (FDCPA): An Overview The Fair Debt Collection Practices Act (FDCPA) is a law which was established in 1978 to eradicate the abusive and unfair debt collection practices of debt collectors in an attempt to recover unpaid debts. The main objective of this act is to promote fair debt collection practices in the United States. However, the law does not apply to collection of personal debt in which case the creditor requests for a pay off directly from the debtor. Guidelines For Debt Collectors The Act designed a set of rules to guide the conduct of the debt collectors. It requires the following practices while recovering a debt owed by a debtor.