Governments regulate debt collectors to protect consumers from predatory practices. These restrictions may lower repayment, reducing the supply of mainstream credit and increasing demand for alternative credit. Using individual credit record data and a difference-in-differences design comparing consumers in states that tighten restrictions on debt collection to those in neighboring states that do not, I find that restricting collections reduces access to mainstream credit and increases payday borrowing. These findings provide new evidence of substitution between alternative and mainstream credit and point to a trade-off between shielding consumers from certain collection practices and pushing them into higher cost payday lending markets.FINANCIAL DISTRESS IS PERVASIVE AMONG American consumers. As of December 2016, over $600 billion of outstanding household debt was past due and two-thirds of those balances were at least 90 days late (FRBNY ( 2016)). When facing unmet payments, creditors commonly turn to debt collectors to minimize their losses. Collection agencies recovered nearly $79 billion from millions of consumers in 2016 (ACA International (2017)).Given their role in extracting payments from borrowers, often through litigation, it is unsurprising that the debt collection industry has attracted