Editing Debt collection (section)

===Purchasers of debts===
Debt collection may involve the sale of a debt to a third party company, sometimes referred to as a "[[Factoring (finance)|factor]]" or "[[debt buyer]]". The debt buyer purchases accounts and debts from creditors for a percentage of the value of the debt and may subsequently pursue the [[debtor]] for the full balance due, including any interest that accrues under the terms of the original loan or credit agreement. The sale of debts and accounts provides a creditor with immediate revenue, albeit reduced from the face value of the debt, while shifting the work and risk of debt collection to the debt buyer.<ref>{{cite journal|last=Palmeri|first=Christopher|title=Debt Collection Puts on a Suit|journal=[[BusinessWeek]]|issue=3959|pages=86|date=14 November 2005}}</ref>

In the United States during the [[savings and loan crisis]] of the 1980s, there was a huge resurgence of [[foreclosure]]s and written-off accounts, similar, although on a much smaller scale, to that of the [[Great Depression]]. Some financial innovators decided that there may be some profit in buying up delinquent accounts and attempting to collect a small portion of the amount due. They purchased these accounts from the original lenders at pennies on the dollar, and turned profit by collecting a fraction of what was owed by the debtor.

Some states have specific laws regarding debt buying. Massachusetts requires companies that buy debt to be licensed while California does not.<ref>{{cite web|title=Debt-Buyer Licensing Requirements|url=https://www.collectionlicenses.com/debt_buyer_requirements/|website=Collection Licenses|publisher=Orion State Licensing|access-date=19 January 2018}}</ref>