Debt Collection Lawsuits Are on The Rise — Here’s What You Can Do About It

Collection agencies aren’t just calling anymore — they’re suing. Debt claims are flooding American courts, with filings now surpassing pre-pandemic levels in several states. With stimulus checks gone, jobless aid dried up, and inflation driving heavier credit card use, ~25% of adults now have debt in collections. For many, that means missed payments are no longer just a credit score issue — they’re turning into court dates.

• Thanks to AI-powered filing systems, agencies can now file lawsuits at scale (a tactic known as mass litigation), with LVNV Funding more than tripling its filings between 2019 and 2024.
• Connecticut, Minnesota, North Dakota, and Texas are back to — or above — pre-pandemic lawsuit volumes, as debt buyers scoop up overdue accounts for cheap and sue for the full balance, plus interest.

Fighting back: Roughly 70% of defendants lose by default — simply because they don’t show up to court. That’s why it’s critical to open every legal notice, track response deadlines, and contact the court clerk for free response forms. Legal aid programs or referrals from the National Consumer Law Center can help connect you with support, and you should always demand proof that the collector actually owns your debt. Often, they can’t provide it — and when that happens, lawsuits often get dismissed. But silence almost guarantees a default judgment — and it can come with serious financial consequences.