The number of debt collection lawsuits have grown to “dominate” state court dockets across the country, and represent the most common type of case in nine of 12 states for which data is available, according to a report issued yesterday by the Pew Charitable Trusts, a non-profit public policy organization.
Defendants in debt collection suits also rarely have an attorney with them, according to the report, which analyzed data from courthouses across the country during the past decade. Lawyers represent individuals only 10% of the time, according to the data, even though individuals who have representation are more likely to win their cases.
The lack of representation likely explains why plaintiffs obtain default judgments in 70% of the cases that are filed against individuals with unpaid debts.
Between 1993 and 2013, the number of debt collection cases more than doubled, to 4 million, from 1.7 million. That trend looks like it will continue as more courts release data. In Texas, for example, the number of debt collection lawsuits double between 2014 an 2018, and account for 30% of all civil cases filed in The Lone Star State.
“Most of our reporting comes from when the economy was strong, but debt collection cases were continuing to increase,” said Erika Rickard, director of the civil legal system modernization project at Pew, in a published report. “As we’re seeing economic activity slow down and household debt continue to accumulate, we’re anticipating, and courts are anticipating, seeing an increase in these court cases.”
Among the recommendations made by Pew in the report are:
- Track data about debt claims to better understand the extent to which these lawsuits affect parties and at which stages of civil proceedings courts can more appropriately support litigants.
- Review state policies, court rules, and common practices to identify procedures that can ensure that both sides have an opportunity to effectively present their cases.
- Modernize the relationship between courts and their users by providing relevant and timely procedural information to all parties and moving more processes online in ways that are accessible to users with or without attorneys.