A “tidal wave” of lawsuits seeking to collect and recover on unpaid debts is “imminent,” according to SoloSuit, a company that helps individuals respond to collection lawsuits. The report also ranked the companies that were plaintiffs in the most collection lawsuits and the law firms that filed the most lawsuits on behalf of creditors.
Rising levels of household debt will drive the increase in collection lawsuits, according to the company, which published a report last week that analyzed collection lawsuit activity in the most populated counties in three different states — California, Florida, and Texas.
SoloSuit was founded back in 2018 as part of a project that students at Brigham Young University conducted to help consumers represent themselves in collection lawsuits.
The cynic in me thinks it’s quite coincidental that a company that makes its money by helping consumers defend themselves against collection lawsuits is predicting a “tidal wave” of new lawsuits to be filed, especially when the report highlights that as household debt has increased during the past decade, collection lawsuit activity in those three states has decreased, overall. One explanation for the decrease in collection lawsuits is that more consumers were able to pay their debts in recent years — thanks to stimulus funds and forbearance and moratoriums on making debt payments because of the COVID-19 pandemic. Now that those are over, the increasing levels of household debt will lead to more consumers who are unable to make payments and an influx of collection lawsuits, the report concludes.
The report ranked Capital One as the most litigious debt collector, when looking at the data from those three states. The company filed 440,658 collection lawsuits between 2000 and 2023, besting Midland Funding (407,477) and Portfolio Recovery Associates (379,379). Debt buyers and credit card issuers were the most frequent filers of collection lawsuits, according to the report.
When consumers answer collection complaints, the lawsuit is subsequently dismissed almost 25% of the time, according to the report. About 7% of cases are settled, collectors obtain judgments 37% of the time, and the remaining 32% of cases are still pending.