Debt collection is the process by which a person or entity who is owed money or property seeks payment for the debt. Debt collection may be performed by the person or entity who is owed the debt (the creditor), or may be performed by a third-party debt collector hired by the creditor to collect the debt on behalf of the creditor. Sometimes creditors sell the debt to another entity at a discounted value, and the entity that purchases the debt becomes the creditor.

Debts that are often the subject of debt collection efforts include (1) credit card debt; (2) car or auto loan debt; (3) medical debt; (4) student loan debt; (5) unpaid utility and telephone bills; and (6) personal loan debt.

If you owe money, you have a legal obligation to repay it. But state and federal laws—such as the Fair Debt Collection Practices Act—prohibit debt collectors from using deceptive or abusive behavior to collect the debt.

In Wisconsin, debt collection is regulated by both state statutes and federal law. The Wisconsin Consumer Act (Wis. Stat. §§ 421-427) provides protections for consumers regarding credit transactions and debt collection practices. Additionally, the federal Fair Debt Collection Practices Act (FDCPA) prohibits debt collectors from using deceptive, abusive, or unfair practices to collect debts. This applies to various types of debts including credit card debt, auto loans, medical bills, student loans, utility bills, and personal loans. Debt collectors in Wisconsin must adhere to these laws, which set forth the legal methods for debt collection and outline the rights of consumers. For instance, collectors cannot harass or threaten consumers, must provide debt verification upon request, and are restricted in the times they can contact debtors. If a debt is sold to a third party, the new creditor assumes the rights and responsibilities of the original creditor and must also comply with these regulations. Consumers who believe their rights have been violated can file a complaint with the Wisconsin Department of Financial Institutions or seek legal recourse.