To Reform Debt Collection Litigation, Courts Need Better Data
One in 50 U.S. adults were sued by businesses for overdue medical bills, auto loans, or credit card debt in 2022. Debt collection cases dominate civil court dockets throughout the nation, yet in most instances, the people who are being sued never show up to court, and as a result, up to 82% of these lawsuits end in default judgments—or automatic wins—for the plaintiff. And although nearly all plaintiffs have attorneys, often fewer than 4% of people who have been sued for a debt have lawyers. Once a judgment is entered, courts, on behalf of plaintiffs, have broad enforcement mechanisms: They can seize personal property, garnish wages, or wipe a bank account to zero.
However, comprehensive state-level data on the extent of these problems is lacking. Research from The Pew Charitable Trusts highlights three key solutions:
- Require businesses filing debt lawsuits to demonstrate to the court that they are suing the right person for the right amount.
- Streamline court processes by eliminating unnecessary and complex paperwork.
- Simplify and strengthen garnishment processes and protections.
Pew conducts objective, nonpartisan research, analysis, and technical assistance, informed by the perspectives of diverse stakeholders, to help state and local leaders better understand court policies and processes, identify problems, and develop evidence-based solutions. The resources collected here examine how civil courts handle consumer debt cases and offer insights on how to use data to improve debt litigation and to make courts more open, effective, and equitable.
For more information on Pew’s research, no-cost analysis, and technical assistance, contact Lester Bird at [email protected].
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