Report

May 2020

How Debt Collectors
Are Transforming
the Business of State
Courts
Lawsuit trends highlight need to modernize civil legal systems

Blank page

Contents
1

Overview
Methods 3

4Fewer people are using the courts for civil cases
Civil Courts and Available Data 5

5

Most civil cases today are brought by businesses against
individuals for money owed

8

Debt claims increasingly dominated civil court dockets
Factors Contributing to the Rise of Debt Claims 11

13

Courts are not designed to respond to the realities of debt claims
Debt claim defendants rarely have legal representation 13
Debt lawsuits frequently end in default judgment, indicating that many people do not respond when sued
for a debt 15
What are the steps of a debt claim? 15
Racial Disparities in Debt Claims 17

17

Default judgments can exact heavy tolls on consumers
Excess costs 17
Court-enforced collection 18
Arrest and incarceration 18

19

A lack of readily available data obscures procedural problems andconsumer harm

20States are beginning to recognize and enact reforms to address
the challenges of debt claims
Reviews of state policies, rules, and common practices 20
New policies require courts to verify that all parties are notified about lawsuits and court dates 22
Additional documentation requirements oblige courts to ensure that debt claims are accurate andvalid 22
State laws enhance prohibition of judgments on time-barred debts 22Modernization of court-user interactions 23
Providing relevant timely procedural information to all parties 23
Some courts incorporate technology as a tool 23

24

Conclusion

25

Appendix: Methodology
Literature review 25

Expert interviews 25
Court data analysis 25
Limitations 30

31

Endnotes

The Pew Charitable Trusts
Michael D. Thompson, vice president
Yolanda Lewis, senior director

Team members
Erika Rickard, project director
Darcy White, research officer
Qudsiya Naqui, officer
Lester Bird, associate manager
Amie Lewis, senior associate

External reviewers
The report benefited from the insights and expertise of Jessica Steinberg, associate professor at the George
Washington University Law School; Alan White, professor at City University of New York School of Law; andTony Fabelo, senior fellow at Meadows Mental Health Policy Institute of Texas. Although they reviewed various
drafts and the report’s findings, neither they nor their organizations necessarily endorse the conclusions.

Acknowledgments
Pew’s civil legal system modernization project thanks consultant Jenifer Warren for drafting this report. The
team also thanks Pew staff members Justine Calcagno, Jennifer V. Doctors, Natasha Dulin, Alex Horowitz,
Sarah Leiseca, Bernard Ohanian, Jennifer Peltak, Chrissy Steigelman, and Alan van der Hilst for their thoughtful
suggestions, production assistance, and research guidance and support. Many thanks also to Amber Ivey andother current and former colleagues who made this work possible.

Cover photo: Gaby Bonilla

Contact: Josh Rosenblum, communications officer Email: jrosenblum@pewtrusts.org
Project website: pewtrusts.org/en/projects/civil-legal-system-modernization

The Pew Charitable Trusts is driven by the power of knowledge to solve today’s most challenging problems. Pew applies arigorous, analytical approach to improve public policy, inform the public, and invigorate civic life.

Overview
The business of state civil courts has changed over the past three decades. In 1990, a typical civil court docketfeatured cases with two opposing sides, each with an attorney, most frequently regarding commercial mattersand disputes over contracts, injuries, and other harms. The lawyers presented their cases, and the judge, acting
as the neutral arbiter, rendered a decision based on those legal and factual arguments.
Thirty years later, that docket is dominated not by cases involving adversaries seeking redress for an injury or
business dispute, but rather by cases in which a company represented by an attorney sues an individual, usually
without the benefit of legal counsel, for money owed. The most common type of such business-to-consumer
lawsuits is debt claims, also called consumer debt and debt collection lawsuits. In the typical debt claim case, abusiness—often a company that buys delinquent debt from the original creditor—sues an individual to collecton a debt. The amount of these claims is almost always less than $10,000 and frequently under $5,000,
and typically involves unpaid medical bills, credit card balances, auto loans, student debt, and other types ofconsumer credit, excluding housing (mortgage or rent).
For more than a decade, the American Bar Association and legal advocacy organizations such as the Legal
Services Corporation and the National Legal Aid and Defenders Association have sounded alarms about
worrisome trends underway in the civil legal system. And court leaders have taken notice. In 2016, a committeeof the Conference of Chief Justices, a national organization of state supreme court heads, issued a report
recommending that courts enact rules to provide a more fair and just civil legal system, especially with respect
to debt collection cases. Chief justices of various supreme courts, with support from private foundations, haveestablished task forces to probe the issue further.
However, until relatively recently, these discussions were largely confined to court officials, legal aid advocates,and other stakeholders concerned about the future of the legal profession. In most states, policymakers have notbeen a part of conversations about how and why civil court systems are shifting; the extent to which the changes
might lead to financial harm among American consumers, especially the tens of millions of people in the U.S. whoare stuck in long-term cycles of debt; and potential strategies to address these issues.
To help state leaders respond to the changing realities in civil courts, The Pew Charitable Trusts sought todetermine what local, state, and national data exist on debt collection cases and what insights those data could
provide. The researchers supplemented that analysis with a review of debt claims research and interviews with
consumer experts, creditors, lenders, attorneys, and court officials.
The key findings are:• Fewer people are using the courts for civil cases. Civil caseloads dropped more than 18 percent from2009 to 2017. Although no research to date has identified the factors that led to this decline, previous
Pew research shows lack of civil legal problems is not one of them: In 2018 alone, more than half of all U.S.
households experienced one or more legal issues that could have gone to court, including 1 in 8 with a legal
problem related to debt.
• Debt claims grew to dominate state civil court dockets in recent decades. From 1993 to 2013, the numberof debt collection suits more than doubled nationwide, from less than 1.7 million to about 4 million, andconsumed a growing share of civil dockets, rising from an estimated 1 in 9 civil cases to 1 in 4. In a handfulof states, the available data extend to 2018, and those figures suggest that the growth of debt collections
as a share of civil dockets has continued to outpace most other categories of cases. Debt claims were the1most common type of civil case in nine of the 12 states for which at least some court data were available—
Alaska, Arkansas, Colorado, Missouri, Nevada, New Mexico, Texas, Utah, and Virginia. In Texas, the only
state for which comprehensive statewide data are available, debt claims more than doubled from 2014 to2018, accounting for 30 percent of the state’s civil caseload by the end of that five-year period.
• People sued for debts rarely have legal representation, but those who do tend to have better outcomes.
Research on debt collection lawsuits from 2010 to 2019 has shown that less than 10 percent of defendants
have counsel, compared with nearly all plaintiffs. According to studies in multiple jurisdictions, consumers
with legal representation in a debt claim are more likely to win their case outright or reach a mutuallyagreed settlement with the plaintiff.
• Debt lawsuits frequently end in default judgment, indicating that many people do not respond whensued for a debt. Over the past decade in the jurisdictions for which data are available, courts have resolved
more than 70 percent of debt collection lawsuits with default judgments for the plaintiff. Unlike most court
rulings, these judgments are issued, as the name indicates, by default and without consideration of thefacts of the complaint—and instead are issued in cases where the defendant does not show up to courtor respond to the suit. The prevalence of these judgments indicates that millions of consumers do notparticipate in debt claims against them.
• Default judgments exact heavy tolls on consumers. Courts routinely order consumers to pay accrued
interest as well as court fees, which together can exceed the original amount owed. Other harmful
consequences can include garnishment of wages or bank accounts, seizure of personal property, and evenincarceration.
• States collect and report little data regarding their civil legal systems, including debt cases. Although
49 states and the District of Columbia provide public reports of their cases each year, 38 and the district
include no detail about the number of debt cases. And in 2018, only two states provided figures on default
judgments in any of their state’s debt cases. Texas is the only state that reports on all types of cases,
including outcomes, across all courts.
• States are beginning to recognize and enact reforms to address the challenges of debt claims. From2009 to 2019, 12 states made changes to policy—seven via legislation and five through court rules—toimprove courts’ ability to meet the needs of all debt claim litigants. Examples of such reforms include
ensuring that all parties are notified about lawsuits; requiring plaintiffs to demonstrate that the named
defendant owes the debt sought and that the debt is owned by the plaintiff; and in some states, enhanced
enforcement of the prohibitions on lawsuits for which the legal right to sue has expired.
Based on the findings of this analysis and these promising efforts in a handful of states, Pew has identified three
initial steps states can take to improve the handling of debt collection cases:• Track data about debt claims to better understand the extent to which these lawsuits affect parties and atwhich 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 bothsides 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 orwithout attorneys.
In 2010, the Federal Trade Commission (FTC) issued a report on the lack of adequate service to consumers instate courts that concluded, “The system for resolving disputes about consumer debts is broken.”1 In the decadesince, this problem has not abated and if anything has become more acute. Furthermore, the challenges that this2

report reviews regarding debt collection cases epitomize challenges facing the civil legal system nationwide. This
report summarizes important but inadequately studied trends in civil litigation, highlights unanswered questions
for future research, and outlines some initial steps that state and court leaders can take to ensure that civil courts
can satisfy their mission to serve the public impartially.

Methods
This study involved a three-step approach to analyze debt collection lawsuit trends in state courts andthe significance for consumers. To identify common characteristics and potential consequences ofthese cases, Pew researchers conducted a literature review of approximately 70 peer-reviewed and graystudies and performed semistructured interviews with experts from state and local courts, consumer
advocacy organizations, and the credit and debt collection industries. To analyze the volume of debt
claims in the United States and the extent to which courts track and report relevant data, researchers
reviewed data from the National Center for State Courts (NCSC), including national caseload statistics
from 2003 to 2017 and breakdowns of civil case types in 1993 and 2013, the most recent year for which
this level of detail is available. Researchers also collected and analyzed annual court statistical reports
for all 50 states and the District of Columbia from 2017 and, where available, from 2005, 2009, 2013,
and 2018. Pew researchers conducted quality control for each step to minimize errors and bias. For more
information, see the full methodological appendix.

3Fewer people are using the courts for civil cases
Beginning in at least the 1980s and continuing through the first decade of the 21st century, caseload volume incivil courts was on an upward trajectory.2 After peaking in 2009, however, it began to decline and by 2017 had
dropped to levels not seen in 20 years.3 (See Figure 1.)

Figure 1

After Sharp Growth, Civil Court Cases Declined More Than 18%
Over 8 Years
National caseload estimates, 2003-17
20
19
18

Millions

17
16
15
14
13
12
2003 2004 2005 2006 2007 2008 2009 2010

2011

2012

2013

2014

2015

2016

2017

Years

Source: K. Genthon, senior court research analyst, Court Statistics Project, National Center for State Courts, email to The Pew
Charitable Trusts, Sept. 5, 2019
© 2020 The Pew Charitable Trusts

Court systems in 44 states, the District of Columbia, and Puerto Rico reported total civil caseloads to NCSC’s
Court Statistics Project in 2009 and 2017, and of those, 41 systems described lower caseloads over that span,
both in raw numbers and per capita.4
A full examination of drivers of the decline in civil caseloads is outside the scope of this analysis. However,evidence indicates that the drop is not the result of a decrease in legal issues that people could bring to the court.
A recent Pew survey found that in 2018, more than half of U.S. households had a legal issue that could have been
resolved in court, and that 1 in 4 households had two or more such issues.5

4

Civil Courts and Available Data
State courts hear cases in five categories: criminal, civil, family, juvenile, and traffic. For the purposes ofthis report, and in keeping with the way courts typically divide their dockets, civil cases are organized into
five categories:
Debt collection: Suits brought by original creditors or debt buyers claiming unpaid medical, credit card,
auto, and other types of consumer debt exclusive of housing (e.g., mortgage or rent).
Mortgage foreclosure: Suits brought by banks and other mortgage lenders seeking possession of aproperty as collateral for unpaid home loans.
Landlord-tenant: Predominantly eviction proceedings, with a smaller subset of suits brought by landlordsfor unpaid rent.
Tort: Personal injury and property damage cases; medical malpractice; automobile accidents; negligence;and other claims of harm.
Other: Other contract disputes; real property; employment; appeals from administrative agencies; civil
cases involving criminal proceedings;6 civil harassment petitions; and “unknown” cases where the casetype was undefined or unclear.
Further, state civil courts are tiered based on the dollar amount of the claims they hear:7• General civil matters, characterized by high dollar amounts (minimum value of $12,000 to $50,000,
depending on the state; no maximum).
• Limited civil matters of moderate dollar amounts (minimum value of zero to $10,000 and maximumof $20,000 to $100,000, depending on the state).
• Small claims with the lowest dollar amounts (no minimum value; maximum of $2,500 to $25,000,
depending on the state).
State laws dictate the jurisdiction—city, county, state, etc.—in which a plaintiff can file a suit and, basedon the dollar amount of the claim, the tier of court appropriate to the claim. Courts that disaggregate
their data in annual statistical reports typically report on claims filed in the general and limited civil
courts based on the above five case types (or some variation). However, most states do not disaggregate
information on claims filed in small claims jurisdiction courts.

Most civil cases today are brought by businesses against individuals formoney owed
The most recent national data available show that, as the overall volume of cases has declined, business-toconsumer suits, particularly debt collections, mortgage foreclosure, and landlord-tenant disputes, have come toaccount for more than half of civil dockets.8 (See Figure 2.) As a committee of the Conference of Chief Justices
put it in 2016, “Debt collection plaintiffs are almost always corporate entities rather than individuals, andlandlord-tenant plaintiffs are often so.”95

Figure 2

More Than Half of Civil Litigation in 2013 Involved Suits Brought by
Businesses Against Individuals
Estimated share of state civil cases by type

Debt collection

24

%

16
Tort 7
Other 24Mortgage
foreclosure 11
Landlordtenant 19

Multiple case
types

%

%

%

54

%

%
%

Cases filed in general and limited jurisdictions

Cases filed in small claims jurisdictions

Note: Percentages do not add up to 100 percent because of rounding.
Source: P. Hannaford-Agor, S.E. Graves, and S.S. Miller, “The Landscape of Civil Litigation in State Courts” (2015), https://www.ncsc.org/~/media/Files/PDF/Research/CivilJusticeReport-2015.ashx© 2020 The Pew Charitable Trusts

As of 2013, civil business-to-consumer lawsuits exceeded all court categories except traffic and criminal, andthat same year, state courts heard more business-to-consumer cases than family (or “domestic relations”) andjuvenile cases combined.10 (See Figure 3.)

6

Figure 3

Business-to-Consumer Civil Suits Exceed Family and Juvenile Cases
Combined
Estimated case volume in 2013, by court category, in millions
10.0
9.0
8.0

9.1
7.8

7.0
6.0
5.0

5.2

4.0
3.0
2.0
1.0
0.0

1.4
Civil: business-toconsumer cases

Civil: all othercivil cases

Family: all cases

Juvenile: all cases

Sources: “Examining the Work of State Courts: An Overview of 2013 State Court Caseloads” (2015), http://www.
courtstatistics.org/~/media/Microsites/Files/CSP/EWSC_CSP_2015.ashx; P. Hannaford-Agor, S.E. Graves, and S.S.
Miller, “The Landscape of Civil Litigation in State Courts” (2015), https://www.ncsc.org/~/media/Files/PDF/Research/
CivilJusticeReport-2015.ashx© 2020 The Pew Charitable Trusts

Although organizing civil litigation cases into discrete categories can be useful for broad analytical purposes,
determining exactly how many cases fall into each group is not so simple. For example, some landlord-tenant
disputes involve individual landlords rather than companies, so a subset of cases within that category may not
fall under the business-to-consumer umbrella. On the other hand, a large share of cases filed in small claims
court are low-dollar-value business-to-consumer lawsuits, but because courts typically do not distinguish small
claims by case type, the exact proportion is difficult to determine. Accordingly, Figures 2 and 3 almost certainly
understate the share of civil court cases that involve businesses suing individual consumers because it treatssmall claims as a wholly separate category.

7

Debt claims increasingly dominated civil court dockets
The most recent national data show that, as of 2013, debt collection lawsuits—which most often involve unpaid
medical, auto loan, or credit card bills—have become the single most common type of civil litigation, representing
24 percent of civil cases compared with less than 12 percent two decades earlier.11 (See Figure 4.) From 1993 to2013, the number of debt cases rose from fewer than 1.7 million to about 4 million.12 These figures correspondwith an increase in share from an estimated 1 in 9 of 14.6 million state civil cases nationwide (11.6 percent)to about 1 in 4 of 16.9 million cases (23.6 percent)13. Further, in a national survey by the Consumer Financial
Protection Bureau (CFPB), nearly 1 in 20 adults with a credit report reported having been sued by a creditor ordebt collector in 2014.14

Figure 4

Debt Claims More Than Doubled Over 20 Years

Consumer debt lawsuits in real terms and as a share of civil caseloads, 1993
and 2013

14.6M Civil Cases 1993

16.9M Civil Cases 2013

<1.7M

4M

<12

% debt claims

filed

24 filed% debt claims# debt claims filed (in millions)

Sources: P. Hannaford-Agor, S.E. Graves, and S.S. Miller, “The Landscape of Civil Litigation in State Courts” (2015), https://www.ncsc.org/~/media/Files/PDF/Research/CivilJusticeReport-2015.ashx; B.J. Ostrom and N.B. Kauder, “Examining theWork of State Courts, 1993: A National Perspective From the Court Statistics Project” (1995), https://www.bjs.gov/content/
pub/pdf/ewsc93-npscp.pdf© 2020 The Pew Charitable Trusts

8Notably, the 2013 data show that 75 percent of civil case judgments were for less than $5,200,15 which meansthat in most states, debt claims are typically filed in a limited or small claims court. In fact, NCSC observed in2015 that small claims courts “have become the forum of choice for attorney-represented plaintiffs in lower-value
debt collection cases.”16 As was the case for the business-to-consumer cases shown in Figure 3, the data in
Figure 4 probably undercount debt claims because they do not include any debt collection cases filed in small
claims court.
Only a few state courts have consistently reported data on debt claims since 2013, but the available information
indicates that these lawsuits continue to dominate court dockets. For example, in 2018, the number of debt
collection lawsuits filed across all Texas courts was more than twice what it was in 2014.17 (See Figure 5.) The
state’s small claims courts—known as justice courts—alone experienced a 140 percent increase in debt cases
over that five-year period.18 In total, collectors filed one debt claim for every 19 adults in the state over that span.19
Similarly, Alaska’s District Court, which tries all civil matters in the state for values of $100,000 or less, heard 48
percent more debt claims in fiscal year 2018 than 2013.20

Figure 5

Debt Claims More Than Doubled in Texas Over 5 Years
Top civil cases by type, 2014-18
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,0000

2014
Injury or damage

2018

Debt

Sources: Texas Office of Court Administration, “Annual Statistical Report for the Texas Judiciary, Fiscal Year 2018” (2018),
https://www.txcourts.gov/media/1443455/2018-ar-statistical-final.pdf; Texas Office of Court Administration, “Annual
Statistical Report for the Texas Judiciary, Fiscal Year 2014” (2014), https://www.txcourts.gov/media/885306/AnnualStatistical-Report-FY-2014.pdf© 2020 The Pew Charitable Trusts

9Pew found that in 2018, only 12 states—Alaska, Arkansas, Colorado, Connecticut, Missouri, Nevada, New Mexico,
Texas, Utah, Vermont, Virginia, and Wyoming—reported statewide debt claims caseload data for at least oneof their courts on their public websites.21 Virginia, for instance, reports debt claims data for the state’s district
courts—which hear cases with values up to $25,000—but not the circuit courts, which hear cases with values of$4,500 and up.22 Despite these differences, debt claims are consistently among the most common types of casesin the courts that report relevant information. (See Figure 6.) However, in light of the limited number of states andcourts reporting, more data and research are needed to gain a complete picture of what is happening nationwide
and state by state.

Figure 6

Debt Claims Were the Most Common Civil Case in 9 of 12
States With Data
Percentage of debt claims, by state, court tier, and case type, 2018
Multiple courts

General courts

Limited courts

100.0%
80.0%
60.0%
40.0%

Debt collection

Landlord-tenant

Tort

Mortgage foreclosure

Wyoming

Virginia

Missouri

AlaskaUtah

New Mexico

Arkansas

Vermont

Texas

NevadaConnecticut

0.0%

Colorado

20.0%

Other civil matter

Note: These figures reflect only the percentage of debt claims cases heard in court tiers that reported relevant information.
Because some states had data for multiple tiers and others had information for just one court, and because some states
reported by fiscal year and others by calendar year, these figures should not be understood as presenting an apples-to-apples
comparison.
Sources: Alaska Court System, “Alaska Court System Annual Report FY 2018” (2018), https://public.courts.alaska.gov/
web/admin/docs/fy18.pdf; Arkansas Judiciary Office of Research and Justice Statistics, “Statistical Summary to the Annual
Report” (2018), https://public.tableau.com/profile/orjs.arcourts#!/vizhome/AR_Annual_Summary_Public_0/Dashboard1;
Colorado Judicial Branch, “Annual Statistical Report, Fiscal Year 2018” (2018); Connecticut Judicial Branch, “Movementof Added Civil Cases by Case Type, Fiscal Year 1997-98 and 2017-18” (2018); Missouri Courts, “Missouri Judicial Report
Supplement: Fiscal Year 2018” (2018), https://www.courts.mo.gov/file.jsp?id=137295; New Mexico Judiciary, “Statistical
Addendum to the 2018 Annual Report, July 1, 2017-June 30, 2018” (2018), https://www.nmcourts.gov/RealFile/widget/index.
html?tokenGUID=db7b62a0-f438-4f4b-8919-1e4123607041&folderGUID=18be90b3-718f-428b-883c-d70eaef56d3f#;
Supreme Court of Nevada, “Annual Report of the Nevada Judiciary, Fiscal Year 2018 Appendix Tables” (2018); Texas Officeof Court Administration, “Annual Statistical Report for the Texas Judiciary, Fiscal Year 2018” (2018), https://www.txcourts.
gov/media/1443455/2018-ar-statistical-final.pdf; Utah Courts, “Utah District Courts: FY 2018 Case Type by Court” (2018);
Vermont Judiciary, “Appendix I Judiciary Statistics FY 18–Statewide” (2018); Virginia’s Judicial System, “Caseload Statisticsof the General District Courts, January 2018 Through December 2018” (2019); Wyoming Judicial Branch, “Wyoming Circuit
Court Statistics FY 18” (2018)© 2020 The Pew Charitable Trusts

10Factors Contributing to the Rise of Debt Claims
The increase in debt claims parallels two major national trends: a rise in household debt and theemergence of the debt-buying industry.
Americans’ household debt nearly tripled from $4.6 trillion in 1999 to $12.29 trillion in 2016, roughly
overlapping with the period of rapid growth in debt collection litigation.23 Further, as of 2018, an
estimated 71 million people—nearly 32 percent of U.S. adults with a credit history—had debt incollections reported in their credit files, and 1 in 8 households across all income levels had a problem or
dispute related to debt, credit, or loans.24
Most household debt in collection stems from a financial shock, such as a job loss, illness, or divorce, andreflects the broader financial fragility of many American households. Nationwide, 2 in 5 adults say that,without selling personal property or borrowing the money, they would not have enough cash to cover an
emergency expense costing $400,25 and 1 in 3 families report having no savings.26 Medical debt can beparticularly devastating and accounts for more than half of all collections activity.27
Unsurprisingly, low- and moderate-income Americans are disproportionately affected by debt collection.
A 2017 CFPB survey found that people in the lowest income bracket were three times as likely as those in
the highest income group to have been contacted about a debt in collection and that people with lower
incomes also were more likely to have been sued for a debt.28
Creditors who pursue consumer debts into collection include banks and credit unions, hospitals andother medical providers, utility companies, telecommunications companies, auto and student lenders,
and, increasingly, debt buyers—firms that purchase defaulted debts from the original creditors at afraction of the face value, sometimes less than one cent on the dollar, and then attempt to collect on thefull amount owed.29
Debt buyers are key figures in many debt collection lawsuits and may have played a significant role in therise of civil debt cases. During the same 20-year time frame that debt claims increased, 1993 to 2013, thetotal dollar value of debts purchased by debt buyers grew from $6 billion to $98 billion.30 (See Figure 7.)
Continued on next page11

Figure 7

The Face Value of Defaulted Debt Sold on the SecondaryMarket Rose More Than 1,500% Over 2 Decades
Sales of consumer debt to third-party firms, 1993-2013
140
120
100
80
60
40
20

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

0

Source: “The Nilson Report,” https://nilsonreport.com© 2020 The Pew Charitable Trusts

Debt buyers employ various collection methods, but studies show that they are increasingly relying
on litigation.31 Two of the largest publicly traded debt buyers, Encore Capitol and Portfolio Recovery
Associates, saw their legal collections grow 184 percent and 220 percent, respectively, from 2008 to
2018.32
As a result, debt buyers are among the most active civil court users, and in some states, a small
number of debt buyers account for a disproportionate percentage of civil cases filed. For example, in
Massachusetts, nine debt buyers represented 43 percent of civil and small claims caseloads in 2015, andin Oregon, six debt buyers accounted for 25 percent of all civil cases from 2012 to 2016.33

12

Courts are not designed to respond to the realities ofdebt claims
Although civil court dockets have changed, the rules they operate on have largely stayed the same. Courts expect
both parties to mount a case and present legal arguments so that the judge can make a decision based on thefacts.
However, that is not how today’s debt collection lawsuits play out.

Debt claim defendants rarely have legal representation
The U.S. Constitution provides the right to an attorney for most criminal defendants regardless of ability to pay,34
but that right extends to people being sued in civil court only in very limited instances. Instead, civil case litigants
on both sides must pay for their own representation, and data show that such representation is on the decline,
especially for those being sued. NCSC found that from the 1990s to 2013, the share of general matters cases inwhich both sides had a lawyer dropped by more than half, from 96 percent to 45 percent.35
In business-to-consumer suits, and especially debt collection cases, most plaintiffs can afford an attorney, andfiling multiple lawsuits in a single court can lower the cost per lawsuit filed. Consumers, however, typically havelegal representation in less than 10 percent of debt claims. Studies from 2010 through 2019 show that the shareof debt claim defendants who were served—that is, provided with official notification of the suit against them—
who had an attorney ranged from 10 percent in Texas to zero in New York City.36 (See Figure 8.)13

Figure 8

Most Debt Claims for Which Data Are Available Involved Consumers
Without Counsel
Average defendant representation rates across 7 jurisdictions, various years
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Maryland,2009-2010(2,947 cases)

New York City,
2006-2008(365 cases)

Consumers with counsel

Oregon,2014-2016(300 cases)

Philadelphia,
2014-2017(1,797 cases)

Texas,
2007(446 cases)

Utah,
2015-2017(163,382 cases)

Washington,
2012-2016(21,354 cases)

Consumers without counsel

Sources: T. Feltner, J. Barnard, and L. Stifler, “Debt by Default: Debt Collection Practices in Washington 2012-2016” (2019),
https://www.responsiblelending.org/research-publication/debt-default-debt-collection-practices-washington-2012-2016;
P.A. Holland, “Junk Justice: A Statistical Analysis of 4,400 Lawsuits Filed by Debt Buyers” (2014), https://core.ac.uk/
download/pdf/56360427.pdf; Legal Services Corp., “Fiscal Year 2019 Budget Request” (2018), https://www.lsc.gov/mediacenter/publications/fiscal-year-2019-budget-request; M. Spector, “Debts, Defaults and Details: Exploring the Impact of Debt
Collection Litigation on Consumers and Courts” (2011), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1975121; L.
Stifler, T. Feltner, and S. Sajadi, “Undue Burden: The Impact of Abusive Debt Collection Practices in Oregon” (2018), https://www.responsiblelending.org/research-publication/undue-burden-impact-abusive-debt-collection-practices-oregon; C.
Wilner et al., “Debt Deception: How Debt Buyers Abuse the Legal System to Prey on Lower-Income New Yorkers” (2010)© 2020 The Pew Charitable Trusts

These low representation rates have real-world implications. Without representation, consumers are unlikely toknow their full range of options or recognize opportunities to challenge the cases against them.
For example, every state has a statute of limitations for debt collection lawsuits, ranging from three years in
Mississippi to 10 in Rhode Island.37 These laws create an expiration date after which creditors cannot use thecourts to collect on a debt. However, enforcement of that prohibition typically falls on the defendant rather
than on the courts. For example, if a plaintiff sues on such an expired debt, also called a time-barred debt, thedefendant must raise the question of a statute of limitations in order for the court to consider whether the caseis even eligible to be heard. But without professional legal help, most consumers would not have the requisiteknowledge to demand that the plaintiff prove that the case was filed in time.
Of course, even defendants with representation may lose in court if the facts favor the plaintiff. However, analyses
from jurisdictions across the country indicate that when consumers are represented by attorneys, they are more
likely to secure a settlement or win the case outright.38 For example, a study of nearly 297,000 debt cases in
Virginia district and circuit courts disposed between April 2015 and May 2016 found that debt cases were more
likely to be dismissed if defendants were represented by an attorney.39 Similarly, a study of over 165,000 debt
14

cases disposed in Utah from 2015 to 2017 found that 53 percent of represented defendants won their cases,
compared with 19 percent of those without representation.40
These data indicate that the absence of legal counsel can have serious repercussions for defendants in consumer
debt claims. The problem has become sufficiently widespread that in 2016, the Conference of Chief Justices(CCJ) and Conference of State Court Administrators’ (COSCA) Civil Justice Improvement Committee declaredthat lack of representation among defendants is “creating an asymmetry in legal expertise that, without effective
court oversight, can easily result in unjust case outcomes.”41

Debt lawsuits frequently end in default judgment, indicating that many
people do not respond when sued for a debt
Why do so few consumers in debt claims have lawyers? One reason is the prohibitive cost of a lawyer. But
another, indicated by the outcome of large shares of debt collection cases, is that many consumers do notparticipate in the lawsuit at all.
Courts are designed to allow the opposing sides to present legal arguments and facts to support their positions,after which the judge, acting as a neutral arbiter, makes a decision based on that information.

What Are the Steps of a Debt Claim?
In most civil cases, the parties follow the state’s civil procedure:42
1. Plaintiff (e.g., creditor or debt buyer) files a complaint in court and provides notice of the lawsuit to
defendant (i.e., person being sued).
2. Defendant responds with a written answer. If the defendant does not respond, the court issues adefault judgment for the plaintiff.
3. The two parties exchange documents, including discovery (questions and requests for information)and pleadings (written motions and other legal maneuvers).
4. Court holds one or more hearings and possibly a trial. If a trial is held, parties can present evidence to a
judge or jury.
5. Judge issues a ruling, which either party may appeal.
A judge presides over the hearings and possible trial, but the litigants manage nearly every step before
that, and court processes, such as scheduling a hearing, are driven by their actions. Parties can also settle
the case at any time by, for example, negotiating with each other or working with a neutral mediator.
For low dollar amounts, small claims courts use a different procedure, originally designed to provide
streamlined and simplified proceedings, particularly for litigants without attorneys.43 Written answers are
optional, rules of evidence do not apply, and in many jurisdictions, the parties have no immediate right toappeal. The common steps are:
1. Plaintiff files a complaint in court and notifies the defendant about the lawsuit.
2. Parties come to court for a trial in front of a magistrate or other judicial officer.

15

If one side doesn’t participate, however, the process cannot operate as intended. Judges do not independently
evaluate the merit of a case before them; they rely on the defendant to argue that the case is invalid. With nodefendant to argue, and regardless of the reason for the defendant’s failure to respond, court procedure dictatesthat the plaintiff wins automatically via a default judgment.44
And default judgments are alarmingly common in debt claims. Multiple studies have shown that more than 70
percent of debt cases end in default judgments:• In New York City, 4 in 5 cases filed from 2006 to 2008 resulted in a default judgment in favor of debt
buyers.45• In five Colorado counties, 71 percent of collections lawsuits filed from 2013 to 2015 by debt buyers ended in
default judgments for the plaintiffs.46• More than 80 percent of debt claims cases filed by debt buyers in Washington state’s superior court fromJanuary 2012 to December 2016 resulted in default judgments in favor of the plaintiffs.47
In these cases, the court has ruled in favor of the debt collector for the simple reason that the consumer has notparticipated in the case. Although the evidence on why people do not respond to the suits is scant, the available
information suggests that three factors drive many of these instances: practical realities of consumers’ lives,
unfamiliar plaintiffs, or a lack of notification about the suit.
Some consumers who owe a debt see no value in responding to a lawsuit. For example, the presiding judge ofthe Maricopa County (Arizona) Justice Courts has suggested that some defendants believe that their cause isfutile and simply give up in the face of debts they cannot afford to pay.48 Some defendants may be intimidated
or confused by the complexities of the system, while others might be daunted by the prospect of defending
themselves if they cannot afford an attorney.49 One collections attorney observed that some defendants choose
not to respond because they cannot afford to take off—or do not see the value in missing—work to go to court if
they cannot afford to pay the debt, find child care, or secure transportation.50
Observational and interview data reveal that consumers often do not recognize the name of the company that
filed the lawsuit. Debt buyers present a unique challenge in this regard because they are not the original lenders.
Consumers frequently report not responding because they do not recognize the debt buyer suing them.51
Further, although some consumers may actively choose not to respond to debt claims, many are not aware thatthey are being sued. Some evidence, including interviews with civil court judges, suggests that inadequate notice
is responsible for a meaningful share of instances in which defendants fail to respond to debt claims.52 Manystates’ legal requirements regarding conducting service—the process of notifying defendants about a legal action
against them—do not include any mechanism for ensuring that people are actually contacted.53 For example, inmany jurisdictions, the plaintiff is responsible for serving the defendant with court papers but often only by firstclass mail to the defendant’s last known address. Plaintiffs are typically not obligated to ensure that they have thecorrect address.
Further, in some debt claims cases, bad actors may employ faulty or fraudulent service as a litigation tactic. In
California, Illinois, and New York, enforcement actions have been brought against debt claims plaintiffs for “sewer
service”—a practice in which a process server knowingly fails to serve the defendant but attests to the court that
service was made.54
In its 2010 report, the FTC urged states to adopt “measures to make it more likely that consumers will defend inlitigation.”55 Although some states are taking action to ensure that defendants are properly informed of lawsuits
against them, many continue to rely on plaintiffs to notify their opponents while providing little or no oversight.56

16

Whatever the reason for the consumer’s failure to appear, default judgment in debt claims usually means thatthe court makes no finding as to the validity of the debt, the accuracy of the amount sought,57 or whether thecorrect consumer was sued, but simply orders the defendant to pay the debt sought. As a result, debt collectors
sometimes win cases that feature inaccurate information or are filed after the legal right to sue has expired.58
And despite their lack of a factual or legal foundation, default judgments carry the same weight and enforcement
power as any other court decision.

Racial Disparities in Debt Claims
Research indicates that debt collections and related lawsuits disproportionately affect African Americanand Hispanic communities.59 In a study in New York City, 95 percent of people with default debt claims
judgments entered against them lived in low- or moderate-income neighborhoods, and more than half of
those individuals lived in predominantly African American or Latino communities.60 A similar analysis ofcourt judgments over a five-year period in St. Louis, Chicago, and Newark, New Jersey, found that evenafter accounting for income, the rate of default judgments in mostly black neighborhoods was nearly
double that of mostly white ones.61

Default judgments can exact heavy tolls on consumers
Debt collection lawsuits that end in default judgment can have lasting consequences for consumers’ economic
stability. Court and attorney fees can amount to hundreds of dollars, and consumers can face wage garnishment
and liens or even civil arrest for failure to comply with court orders. Over the long term, these consequences can
impede people’s ability to secure housing, credit, and employment.

People don’t appreciate the impacts of a small claim judgment. If this is
on your record, you’re not going to get a housing loan or a car loan, and it
impacts other areas of your life. And all for a very small debt claim.”
Peter Holland, Maryland consumer attorney

Excess costs
Once a default judgment is entered, the consumer typically owes more than the original debt.62 All 50 states andthe District of Columbia allow courts to award debt collectors pre- and post-judgment interest—that is, intereston the money owed before the court judgment and on the judgment amount. The rates vary dramatically acrossstates—from 1.5 percent in New Jersey to 12 percent a year in Massachusetts—and apply only in cases for which
the state has not set or does not permit use of a contract rate, which is typically outlined in the terms for credit
cards, loans, and other consumer debt products.63
Consumers who find themselves paying high interest rates on default judgments can face an even deeper cycle ofdebt. For instance, in 2014, a collector in Washington state won a judgment for a $9,861 medical debt. Although
the defendant had paid roughly $8,500 by 2019, she still owed an additional $8,500 because of interest—
Washington statute sets the post-judgment interest rate at 12 percent—and other costs.64

17

In many states, a default judgment can also require the consumer to bear court and collector’s attorney fees. For
example, one study from Maryland found that on average, courts ordered defendants in debt collection cases topay principal of $2,811, but court costs, plaintiff attorneys’ fees, and interest added $512—more than 18 percent of
the principal—to the total judgment.65

Court-enforced collection
Default judgments grant debt collectors access to a range of legal channels to pursue the debt, including theability to garnish consumers’ paychecks and bank accounts and to put liens on property. A 2017 study byAutomatic Data Processing Inc., one of the nation’s largest payroll providers, found that 1 in 14 U.S. workers were
having paychecks garnished, and that among workers earning $25,000 to $39,000 a year, debt collection was
one of the most common reasons.66
Under federal law, debt collectors are entitled to seize no more than 25 percent of a consumer’s paycheck.67
States have discretion to limit collectors to even less than the federal cap, but rules vary widely. Four states—
North Carolina, Pennsylvania, South Carolina, and Texas—generally prohibit the garnishment of wages to pay
off consumer debts.68 In contrast, Alabama, Arkansas, Georgia, Idaho, Kansas, Kentucky, Louisiana, Maryland,Michigan, Mississippi, Montana, Ohio, Utah, and Wyoming offer no protections beyond the federal minimum.69
The seizure of money from a bank account can be even more devastating than wage garnishment because it
is unrestricted in 16 states, potentially leaving consumers with empty accounts.70 In one study from Missouri,
for example, of 13,000 bank accounts garnished by collectors in 2012, more than 7,500 were entirely drained
because there was less money in the account than the consumer owed.71 Bank account garnishment can also
circumvent wage garnishment caps, because once a paycheck is deposited into a bank account, it is no longer
subject to the limits set by federal or state law, and all the money can be legally garnished.72
Moreover, state seizure protections tend to be infrequently adjusted for inflation or changing times.
Pennsylvania’s exemption law, for example, protects sewing machines, a few other specific items, and up to $300
in additional property but leaves everything else available to debt collectors.73
Asset garnishments and property liens can cause significant financial stress, especially for people whose finances
are already precarious, such as the one-third of Americans who report having no savings and the 51 percent ofworking adults living paycheck to paycheck.74 These seizures can prevent people from selling or refinancing ahome, taking out a loan, or making payments on other bills, and they can last for years. In Missouri, for example, ajudgment to garnish assets is valid for 10 years and can be renewed by court order.75
Despite efforts by policymakers to restrict debt-related seizures, a 2019 review by the National Consumer Law
Center (NCLC) found that every state and the District of Columbia fell short of protecting enough income andsavings to ensure that consumers facing court-enforced collections could still meet basic needs.76

Arrest and incarceration
In the most extreme circumstances, consumers can be arrested and even incarcerated as a result of a debt
collection judgment. Although nationwide, state laws prohibit the jailing of individuals for inability to pay a debt,
in 44 states, people can be held in contempt of court and subject to a civil arrest warrant, typically issued by the
court at the plaintiff’s request, if they fail to appear in court for post-judgment hearings or to provide information
related to their finances.77 Defendants can be incarcerated without access to an attorney or, in some cases,
without even knowing a judgment was entered against them.
Such incarceration is relatively rare, but when it does occur, it can cause significant harm to consumers, mostnotably loss of wages and disruption in employment.78 In addition, the bond that people must pay to get out of jail18

can perpetuate the cycle of debt.79 For instance, an elderly married couple jailed in Maryland in 2014 for failingto appear in court over a housing-related debt of about $3,000 were ordered to pay a $2,900 cash bond—nearly
doubling the underlying debt.80

A lack of readily available data obscures procedural problems
and consumer harm
Although this research highlights key issues in debt collection lawsuits, the picture of the challenges andconsequences remains incomplete because state court data are scarce.81 NCSC’s 2015 report remains the only
national study of debt claims from the past 10 years, and despite a sample size of more than 925,000 cases from152 courts in 10 urban counties, that study examined just 5 percent of state civil caseloads nationally.82
Pew identified 12 states with at least some courts that provide public data on debt claims, as described
previously, but those reports are not sufficiently robust to document trends over time. Just seven states—Alaska,
Colorado, Connecticut, New Mexico, Texas, Utah, and Wyoming—have tracked statewide debt claims caseloads
since 2013, and only Texas reports on debt collection cases for all its courts.83 Further, only Texas and Colorado
identify debt claims as a category within the general civil and small claims dockets in publicly available reports.
In 2018, just New Mexico and Texas reported a cross section of cases and disposition types, including default
judgments, for at least one court type,84 and Texas was the only state to publish the disposition (including default
judgment rate) for debt claims at all dollar amounts and in all courts.
Even fewer states provide details about how debt claims cases are resolved.

Quite honestly, I think it would be helpful for judges to have better data.
All of us have this sense that we see a fair amount of these types of cases
on a consistent basis, but I would be interested to see how many collection
actions were filed in this district.”
District Judge Chris Foy, Iowa Judicial District 2Ay
Court systems have difficulty producing statewide reports in part because they are decentralized andfragmented and generally collect data only for their own administrative purposes.85 Without better data thanare currently available, however, states and researchers cannot effectively evaluate whether debt claims are
increasing, what might be driving that growth, and what the implications are for consumers.
In some states, however, the landscape of available data is beginning to change. Texas is still the clear leader
in reporting, but other states, notably Arkansas, Nevada, and Virginia, have started including debt collection
lawsuits in their annual reports. Nevada also includes a more detailed breakout of the types of debt involved in
debt claims, such as payday loans and credit cards. This information can help policymakers and court officials
understand whether courts are serving the public as intended and make informed decisions about how to best
allocate resources to ensure that taxpayer investments are directed toward the areas of greatest need.

19

States are beginning to recognize and enact reforms to address
the challenges of debt claims
In addition to tracking and reporting debt claims trends, more and more court officials are beginning to takesteps to examine court processes and rethink how debt claims proceed. To date, this work has generally involved
policy and practice reviews and system modernization through technology solutions. Although these efforts are
generally still in the early stages of development, with little data on their effectiveness, they nevertheless present
an opportunity to examine some initial attempts at reform.
Importantly, the potential benefits of these changes are not limited to debt claims. Rather, they point toopportunities to modify court operations and processes to improve experiences for court users on a range ofissues and case types. Future Pew research will examine other challenges facing state civil courts and look at how
these and other reforms might bolster access.

Reviews of state policies, rules, and common practices
To strengthen consumer protections in the processing of debt litigation, the FTC recommended that statesrequire debt collectors to include more information in their complaints about the alleged debt, adopt measures toreduce the chance that collectors will sue for debts that are beyond the statute of limitations, and enact laws “toprevent the freezing of a specified amount in a bank account including funds exempt from garnishment.”86
States have begun to take steps to improve consumer protection—including those outlined in the FTC’s
recommendation—particularly bolstering requirements for litigant notification, documentation of claim validity,
and enforcement of statutes of limitation. (See Table 1.) These efforts represent promising first steps, but further
research is needed to examine their effectiveness in improving court access.

20

Table 1

12 States Have Acted to Help Level the Playing Field in Debt Claims
Litigation
Policy changes by statute and court rule since 2009

Requirements to ensure debt is valid

Prohibition on suing on timebarred debt

California

Statute Cal. Civ. Code § 1788.58(2016)

Statute: Cal. Civ. Code §1788.58 and 60 (2016)

Colorado

Statute: Col. R.S.A. § 5-16-111 (2017)

State

Improvements to notice

Statute: Conn. Gen. Stat.
§§ 36a-800 to 36a-814(2016)

Connecticut

DelawareCourt rule: Administrative Directive
No. 2012-2 (2012)

Maine

Statute: M.R.S.A. Title 32, § 11019(2017)

Minnesota

Statute: M.S.A. § 548.101 (2015)

MarylandCourt rule: Md. Rule 3-306(2012)

Court rule: Md. Rule 3-306 (2012)

Massachusetts

Court rule: Mass. Unif. Small
Claims Rule 2(b) (2009)

Court rule: Mass. Unif. Small Claims
Rule 2(b) (2009)

New York

Court rule: 22 NYCR §§208.6(h), 208.14-a (2014)

Court rule: 22 NYCR §§ 208.6(h),208.14-a (2014)

North Carolina

Statute: N.C. Gen. Stat. § 58-70115(5) and (6) (2009); N.C. Gen.
Stat. § 58-70-150, 155 (2011)

OregonStatute: OR Laws 625 § 1 (2017, rev.
2019)

Texas

Court rule: TRCP 508.2 (2013, rev.
2019)

Statute: M.R.S.A. Title 32, §11019 (2017)

Statute: OR Laws 625 § 1(2017)

Note: States have passed rules or statutes since July 2018.
Source: L. Gal, former consultant, Massachusetts Access to Justice Commission, email to The Pew Charitable Trusts,
July 22, 2018
© 2020 The Pew Charitable Trusts

21New policies require courts to verify that all parties are notified about lawsuitsand court dates
A few jurisdictions have begun to modify court rules to improve their notification requirements. Massachusettschanged its small claims court rules to require that plaintiffs in debt collection cases verify the addresses ofdefendants using reliable sources, such as municipal or motor vehicle records, and demonstrate to the courtthat they successfully served the case information to the correct address.87 New York City adopted a procedurethat requires debt collection plaintiffs to provide the court with a stamped, unsealed envelope addressed tothe defendant with a return address to the court. The envelope contains a standardized notice of the lawsuit,
which the court mails.88 The court will not enter a default judgment if the Postal Service returns the notice as
undeliverable.
In addition to confirming that all parties have been notified about the lawsuit, courts in some states have madesmall but important changes to ensure that consumers understand what the lawsuit is about. Because consumers
sometimes believe that they either do not owe the debt or have already paid it or do not recognize the creditor ordebt buyer that is suing them, Maryland strengthened its rules to require that pleadings include details about theunderlying debt to help consumers more easily identify the debt, reduce confusion, and improve response rates.89

Additional documentation requirements oblige courts to ensure that debt claims
are accurate and valid
Some states have acted to enhance the integrity of debt claims dispositions by requiring courts to examine theplaintiff’s case before issuing a judgment, regardless of whether the defendant is present. These states requirethat plaintiffs provide documentation as a matter of course rather than expecting defendants to ask plaintiffs toprove their cases.
Legislatures are leading these efforts in several states. North Carolina, for instance, passed a law in 2009
prohibiting courts from entering a default judgment unless the plaintiff provides “authenticated business records”
that include the original account number and creditor, the amount of the original debt, an itemization of charges
and fees claimed, and other information.90 And in California, debt buyers must provide specific evidence related
to their ownership of a debt, the amount of the original debt, and the name of the original creditor.91
In addition, court leaders have begun to set rules that require proof of the validity of a debt, even if the defendant
is not in court. As of 2018, 11 states—California, Colorado, Delaware, Maine, Maryland, Massachusetts,
Minnesota, New York, North Carolina, Oregon, and Texas—mandated documentation by court rule or statute.
And in a 2018 policy resolution, the CCJ and the COSCA urged members “to consider enacting rules requiring
plaintiffs in debt collection cases to file documentation demonstrating their legal entitlement to the amounts theyseek to collect before entry of any default judgment where state legislation or court rules do not currently require
the filing of such documentation.”92
Debt buyers, as well as consumer advocates, back requiring additional documentation that a debt is owed. For
example, the Receivables Management Association International, a debt buyer trade group, “supports uniform
standards on account documentation provided that they serve a legitimate purpose and is information thatoriginating creditors are required to maintain.”93

State laws enhance prohibition of judgments on time-barred debts
In May 2019, the CFPB proposed amendments to its rules that enforce the federal Fair Debt Collection Practices
Act.94 The draft rules included a new provision stating that “a debt collector must not bring or threaten to bringa legal action against a consumer to collect a debt that the debt collector knows or should know is a time-barred22

debt.” As described earlier, most states currently place the responsibility on the defendant to question whether adebt has expired,95 and it is unclear whether the proposed rule would authorize courts to review cases for timing
compliance even if a consumer does not raise the defense.
In the absence of specific federal rules, however, state legislators have taken up the issue of time-barred debt.
Oregon law, for instance, prohibits a debt collector from knowingly filing legal action on a time-barred debt.96
Debt industry representatives argue that suing on time-barred debt is already illegal and that plaintiffs do notknowingly file such lawsuits.97 However, court data and judicial oversight are needed to confirm these assertions
and to ensure that courts are not ruling in favor of collectors on invalid claims.

Modernization of court-user interactions
Some states are investing resources to leverage technology and adapt court procedures to better support
self-represented litigants and improve court accessibility, affordability, and participation. These efforts include
modifying court forms, enhancing outreach to consumers, and adopting online tools that make legal information
and basic court services more easily available to users.

Providing relevant timely procedural information to all parties
Clear, accessible procedural information has the potential to yield significant benefits to court users and court
operations. For example, Harvard Law School’s Access to Justice Lab conducted a randomized control trial inpartnership with the Boston Municipal Court and found that debt claim defendants who received mailings fromthe court participated in their lawsuits at twice the rate of people who received no information by mail.98
Courts in several states have undertaken modernization efforts, such as updating legal documents with easyto-understand language; providing information in multiple languages; and using illustrations, videos, and otheralternative formats.99 In Alaska, for example, courts have created a self-help debt collection case website,
developed a variety of plain-language forms, solicited feedback from the legal community on the revised forms,
and proposed changes to court rules to facilitate participation by litigants without lawyers100 in response to aninternal analysis, which showed widespread problems with debt claim cases.101
Similarly, Collin County, Texas, Justice of the Peace Chuck Ruckel, who hears more debt claims than any othercase type and estimated that up to 98 percent of defendants in those cases have no lawyer, said the mostcommon question he receives is, “What should I do?” His court distributes a self-help packet, titled “Whena Debt Claim Case Has Been Filed Against You” and produced by the Texas Court Training Center, that helps
people understand the steps they need to take when being sued.102
One critical consideration for courts is whether the information they provide is not merely available but in fact
helpful to users. In 2019, the CCJ and COSCA passed a resolution103 calling on courts to generate “documents,
forms, and other information … that is clear, concise, and easily comprehensible to all court users” and to explore
online services as well as written self-help. These tools, whether static written information, interactive online
content, in-person guidance, or some combination of the three, must be useful and usable.104

Some courts incorporate technology as a tool
Research increasingly suggests that technology holds promise for improving legal information and consumer
outreach.105 In particular, several states, such as Illinois, Maine, Michigan, and Ohio, have created online legal
assistance portals that contain self-help tools including explanatory articles, answers to common questions, stepby-step instructions for resolving a legal issue, and automated “interviews” that help litigants clarify and address
their legal issues and complete court forms.106 Some portals also provide links to lawyer referral services, self-help
centers, legal aid programs, and other community resources.

23

In addition, some court systems have begun harnessing technology to enable remote litigant participation inlegal processes, particularly through online dispute resolution (ODR), a tool already used in the private sector
to resolve disagreements between consumers and online merchants. In the court context, ODR allows people
to handle civil legal disputes without setting foot in a courtroom, and state and local leaders are increasingly
looking to this approach to streamline people’s interactions with civil courts and help court staff better
manage caseloads. Since early 2019, chief justices of the supreme courts in Hawaii, Iowa, Texas, and Utah havehighlighted ODR as a key priority in their State of the Judiciary addresses.107
Some jurisdictions—such as West Valley City, Utah, and Franklin County, Ohio—have begun using ODR for small
debt claims in part to reduce the time that cases take to resolve.108 However, moving debt collection cases online
is not a panacea. Without recognized best practices, some experts say, ODR could present its own risks for
consumers. Lisa Stifler of the Center for Responsible Lending noted that “ODR has the potential to offer avenues
to consumers to respond to lawsuits against them, but there are concerns about consumers unknowingly waiving
rights or legal claims or defenses.”109
To address such concerns, the NCLC put out guidance for courts to consider when moving debt cases online.110
Additionally, as part of its upcoming research agenda, Pew plans to conduct evaluations of this technology toassess the risks and benefits for courts and ODR users.

I think the number one thing to remember is that not only the state but also
the federal Constitution says that every person has the right to have theirchance in court. We need to make it easier for them, through technology orsome other means.”
Chuck Ruckel, justice of the peace, Collin County, Texas

Conclusion
From 1993 to 2013, the number of debt claims filed in civil courts across the country increased to the point of
becoming the single largest share of civil court business over that span, particularly as people used civil courts
less for other issues. The analysis underpinning this report found that, as a category, debt claims have largely
one-sided outcomes, raising troubling questions about legal proceedings and case dispositions. It also revealed
gaps in the available data as well as other topics that would benefit from additional research, such as why fewer
people are using civil courts than in the past and whether technology and policy changes intended to modernize
court systems are delivering the desired results.
This report examined early efforts in a handful of states to address these questions and challenges and identified
three initial steps that state and local government officials can take to mitigate the challenges associated withdebt claims and other business-to-consumer cases: Increase the collection and reporting of debt claim data;revise policies and rules; and update civil legal system processes, particularly through the use of technology, tomake the system easier to navigate for people without attorneys.
However, these potential state actions, while important and necessary, amount only to a preliminary effort tomake the civil legal system more accessible because the issues facing civil courts are long-term and far-reaching.
For instance, court leaders, the legal community, and advocates have for years been raising concerns that the civil
legal system is failing not only people sued for a debt but also people facing eviction, navigating child custodyissues, pursuing a divorce, seeking a protective order, or dealing with some other event with life-changing

24

consequences. This report aims to expand the conversation among policymakers at all levels of government
about modernizing the civil legal system to better serve all of its users.

Appendix: Methodology
This study took a three-step approach to analyzing debt collection lawsuit trends in state courts and their impact
on consumers. To identify common characteristics and consequences of these cases, Pew researchers conducted
a literature review of peer-reviewed and gray studies and semistructured interviews with subject-matter experts.
To analyze the volume of debt claims in the U.S. and the extent to which courts track relevant data, researchers
reviewed annual court statistical reports in all 50 states and the District of Columbia. Pew researchers conducted
quality control for each step to minimize errors and bias.

Literature review
Pew researchers conducted a literature review of consumer debt and debt collection lawsuits in the U.S. using
keyword searches via four search engines—EBSCO, Hein Online, Google, and Google Scholar—to identify
research related to debt collection lawsuits. Search terms included but were not limited to: “debt claim,” “debtcollection lawsuit,” “debt litigation,” and “debt collection data.” Researchers also reviewed studies available on thewebsites of 24 organizations with a focus on debt collection or debt claims lawsuits. These searches generated
approximately 130 apparently relevant articles, of which roughly 70 were found to contain information applicableto this study. The researchers examined and coded each article to identify common characteristics and themes indebt collection lawsuits.

Expert interviews
To collect additional insight on debt claims characteristics and consequences, Pew researchers performed
semistructured interviews with three court officials, five consumer advocates and academics, and three credit
lenders and debt collection attorneys.

Court data analysis
To identify the proportion of civil cases that were debt claims in 1993 and 2013, Pew researchers used datareported in two studies conducted by NCSC.111 Although the studies contained different sample courts, basedon geographic diversity and other characteristics, NCSC considered each to be nationally representative. NCSC
found that across all state courts, 64 percent of 16.9 million civil cases are contract disputes and that contract
caseloads consisted primarily of debt collection (37 percent), landlord-tenant (29 percent), and foreclosure (17percent) cases. Pew researchers calculated that debt collection lawsuits represented approximately 24 percentof the civil caseload (0.37 × 0.64 = 0.236), or 3.98 million cases (16.9 million × .236), which is higher than theother aggregated case types.
NCSC’s 1993 study reported 14.6 million civil cases in state courts, of which 8.6 million were filed in limited
jurisdiction courts. In general jurisdiction courts, contracts accounted for 18 percent (or 1.08 million) of the
6 million general jurisdiction cases and 7 percent (or 602,000) of the 8.6 million limited jurisdiction cases.
Contracts therefore made up 11.5 percent (1.08 million + 0.602 million/14.6 million) of the civil caseload.
Debt collection was certainly less than 100 percent of the contract caseload. Both 1993 and 2013 figures areunderestimated, as a significant percentage of small claims are also debt collection cases but are not counted in
the contract caseloads.
Pew researchers used data collected by the NCSC Court Statistics Project (CSP) to analyze changes in state civil
caseloads from 2009 to 2017. Idaho, Illinois, Mississippi, New Mexico, and Oklahoma did not report civil court

25

data to CSP in 2017. A total of 40 states, as well as the District of Columbia and Puerto Rico, reported decreases
in total civil filings from 2009 to 2017. Forty-three states, plus the District of Columbia and Puerto Rico, reported
a decrease in civil filings per capita. Hawaii, North Dakota, and South Carolina reported increases in total civil
filings but decreases in filings per capita. And the only states to report increases in total and per capita civil filings
were Pennsylvania and Texas.
To identify debt claims reporting trends, Pew researchers searched state court websites for annual statisticalreports. These reports are called by various names—e.g., annual report, court statistical report, court caseload
report, etc.—and commonly include civil court data. Where available, researchers gathered and reviewed
reports for calendar or fiscal years 2005, 2009, 2013, 2017, and 2018. Through this process, Pew was able tocollect civil court data for 49 states and the District of Columbia, though the availability of data for each fiscal or
calendar year varied. For Iowa, the court administrator’s staff provided the reporting that is shared with the state
Legislature and bar association.

Table A.1

49 States and D.C. Provide Court Statistics Reports Online, Though
Available Years Vary
Data websites by state
State

Civil Data Website

Alabama

http://www.alacourt.gov/Publications.aspx

Alaskahttp://www.courts.alaska.gov/admin/index.htm#annualrep

Arizona

https://www.azcourts.gov/statistics/Annual-Data-Reports/2017-Data-Report

Arkansas

https://www.arcourts.gov/forms-and-publications/annual-reports

California

https://www.courts.ca.gov/13421.htm

Coloradohttps://www.courts.state.co.us/Administration/Unit.cfm?Unit=annrep

Connecticut

https://jud.ct.gov/statistics/civil/

Delawarehttps://courts.delaware.gov/AOC/AnnualReports/FY18/index.aspx

District of Columbia

Continued on next page26

https://www.dccourts.gov/about/organizational-performance/annual-reports

Florida

https://www.flcourts.org/Publications-Statistics/Statistics/Trial-Court-Statistical-Reference-Guide

Georgia

http://jcaoc.georgiacourts.gov/content/annual-reports

Hawaiihttps://www.courts.state.hi.us/news_and_reports/reports/annual_report_stat_sup_archive

Idaho

https://isc.idaho.gov/annual-reports

Illinois

http://www.illinoiscourts.gov/SupremeCourt/AnnReport.asp

Indiana

https://publicaccess.courts.in.gov/ICOR/

Iowa

State does not provide court statistical data online.

Kansashttp://www.kscourts.org/Court-Administration/stats/index.html

Kentuckyhttps://courts.ky.gov/aoc/statisticalreports/Pages/default.aspx

Louisiana

https://www.lasc.org/press_room/annual_reports/default.asp

Maine

https://www.courts.maine.gov/news_reference/stats/index.html

Marylandhttps://mdcourts.gov/publications/annualreports
https://datadashboard.mdcourts.gov/#/court/district/activity

Massachusetts

https://www.mass.gov/lists/massachusetts-court-system-annual-reports

Michiganhttps://courts.michigan.gov/education/stats/Caseload/Pages/default.aspx

Minnesota

http://www.mncourts.gov/About-The-Courts/PublicationsAndReports.aspx

Mississippi

https://courts.ms.gov/research/reports/reports.php

Missourihttps://www.courts.mo.gov/page.jsp?id=296

Montana

https://courts.mt.gov/courts/statistics

Continued on next page27

Nebraska

https://supremecourt.nebraska.gov/administration/publications-reports

Nevadahttps://nvcourts.gov/AOC/Templates/documents.aspx?folderID=4479

New Hampshirehttps://www.courts.state.nh.us/cio/data-and-reports.htm#reports-header

New Jersey

https://www.njcourts.gov/public/stats.html

New Mexico

https://www.nmcourts.gov/reports-and-policies.aspx

New York

http://ww2.nycourts.gov/reports/annual/index.shtml

North Carolina
North Dakota
Ohio

https://data.nccourts.gov/explore/?sort=modified
https://www.nccourts.gov/about/data-and-statistics
https://www.ndcourts.gov/state-court-administration/annual-report
http://www.supremecourt.ohio.gov/Publications/default.asp

Oklahoma

http://www.oscn.net/news/

Oregonhttps://www.courts.oregon.gov/about/pages/reports-measures.aspx

Pennsylvania

http://www.pacourts.us/news-and-statistics/research-and-statistics/caseload-statistics

Rhode Island

https://www.courts.ri.gov/PublicResources/annualreports/Pages/default.aspx

South Carolina

https://www.sccourts.org/annualreports/

South Dakota

https://ujs.sd.gov/Resources/PublicInformation.aspx

Tennessee

http://www.tncourts.gov/media/statistical-reports

Texas

http://www.txcourts.gov/statistics/annual-statistical-reports/

Utah

https://www.utcourts.gov/stats/Continued on next page28

Vermont

https://www.vermontjudiciary.org/about-vermont-judiciary/court-statistics-and-reports

Virginia

http://www.courts.state.va.us/courtadmin/aoc/judpln/csi/home.html

Washington

http://www.courts.wa.gov/caseload/?fa=caseload.showarchived

West Virginia

http://www.courtswv.gov/public-resources/press/Publications/index.html

Wisconsin

https://www.wicourts.gov/publications/statistics/circuit/circuitstats.htm

Wyoming

https://www.courts.state.wy.us/circuit-courts/circuit-court-reports-and-statistics/

Sources: “National Center for State Courts AOC State Links,” https://www.ncsc.org/Topics/Court-Management/AdministrativeOffices-of-the-Courts/State-Links.aspx; The Pew Charitable Trusts internal review of state court websites© 2020 The Pew Charitable Trusts

Next, the researchers reviewed the civil court data in each identified source and documented information relatedto:• Civil case filings and outcomes, particularly whether the data were disaggregated by case type.
• Types of civil cases reported.
• Small claims filings and outcomes.
• Debt claims filings and outcomes.
• Definitions of small claims and debt claims.
If a source did not contain the information sought, the research team searched for other public sources on courts’
websites that may include this information—e.g., a data dashboard, etc., using the phrases “civil case data,”“caseload statistics,” or “caseload data.” To ensure that all relevant sources of publicly available court data were
examined, the team also contacted court administration offices in all 50 states and the District of Columbia.
Next, the researchers compiled three simple descriptive statistics to assess reporting trends:• The number of states that disaggregate their filings and outcomes information by case type.
• The number of states that include debt claims as a subcategory within one or more tiers or dollar
thresholds of civil cases (small claims, limited civil, general civil).
• The number of states that report on the number of self-represented litigants.
To identify small and debt claims filings and outcomes trends, researchers collected data from the state reports
identified above for years 2005, 2009, 2013, 2017, and 2018 and documented the following information (whereavailable):• Small claims maximum limit.
• Small claims caseload and default judgments.
• Debt claims caseload and default judgments.
29

Pew researchers were unable to find publicly accessible reports for the following years and states as of October2019:• 2005: Georgia, Iowa, Kentucky, Nebraska, Oklahoma, Vermont, West Virginia, Wyoming.
• 2009: Iowa, Kentucky, Oklahoma, Vermont.
• 2013: Iowa.
• 2017: Idaho, Iowa.
• 2018: Arkansas (labeled 2018 annual report but reporting on 2017 data), Idaho, Illinois, Iowa.
In addition, 20 states and the District of Columbia report their data on a calendar year basis, while 29 do so on afiscal year.
• Calendar year states: Arkansas, District of Columbia, Illinois, Indiana, Kentucky, Louisiana, Michigan,
Minnesota, Montana, New Hampshire, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island,
Virginia, Washington, West Virginia, Wisconsin, Wyoming.
• Fiscal year states: Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia,
Hawaii, Idaho, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, Nebraska, Nevada, New
Jersey, New Mexico, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, andVermont.
• Iowa does not produce public reports.
Where available, the research team performed descriptive analyses of small claims and debt claims trends fromfiscal 2005 to fiscal 2018 to assess:• Differences in filings, including per capita, and default judgment rates.
• Small claims caseload as a percentage of total civil caseload.
• Debt claims caseload as a percentage of small claims caseload.

Limitations
Several factors can contribute to small claims and debt claims trends in each jurisdiction, such as the maximum
dollar amount a plaintiff can sue for in a small claims court, rules and regulations governing the evidence required
to file a debt collection lawsuit, the statute of limitations, filing fees, or the availability of electronic filing. Becauseof timing and resource constraints, assessing all these factors across the states and the District of Columbia
was beyond the scope of this analysis. But this study was able to identify which of the six states that reported
some information about debt claims caseloads in 2013 or earlier had also experienced a change in rules or court
proceedings specifically targeting debt claims.

30Endnotes
1

Federal Trade Commission, “Repairing a Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration” (2010),
https://www.ftc.gov/sites/default/files/documents/reports/federal-trade-commission-bureau-consumer-protection-staff-reportrepairing-broken-system-protecting/debtcollectionreport.pdf.

2

National Center for State Courts, “State Court Statistics, 1985-2001: United States” (Inter-University Consortium for Political and Social
Research, 2005); K. Genthon, senior court research analyst, Court Statistics Project, National Center for State Courts, email to The Pew
Charitable Trusts, Sept. 5, 2019.

3

Genthon, email. Due to differences in reporting, the National Center for State Courts is unable to demonstrate adjusted caseload datapre- and post-2003 to enable them to be charted together. However, NCSC has consistently reported a general upward trend from the
1980s to 2003.

4

Court Statistics Project, “State Court Caseload Digest, 2017 Data” (Conference of State Court Administrators and National Center
for State Courts, 2019), http://www.courtstatistics.org/~/media/Microsites/Files/CSP/Overview/CSP%20Caseload%20Digest%20
2017%20Data%20print.ashx; National Center for State Courts, “State Court Statistics, 2009” (2012), https://www.icpsr.umich.edu/
icpsrweb/NACJD/series/80.

5

E. Rickard, “Many U.S. Families Faced Civil Legal Issues in 2018” (The Pew Charitable Trusts, 2019), https://www.pewtrusts.org/en/
research-and-analysis/articles/2019/11/19/many-us-families-faced-civil-legal-issues-in-2018.

6

For example, cases involving civil asset forfeiture, in which prosecutors file a lawsuit in civil court to keep property (e.g., car or money)
that was allegedly used or seized in a crime.

7

National Center for State Courts, “Civil Jurisdiction Thresholds” (2015), https://www.ncsc.org/~/media/Files/PDF/Topics/Civil%20
Procedure/Civil%20Jurisdiction%20Thresholds%20History.ashx.

8

P. Hannaford-Agor, S.E. Graves, and S.S. Miller, “The Landscape of Civil Litigation in State Courts” (National Center for State Courts,2015), https://www.ncsc.org/~/media/Files/PDF/Research/CivilJusticeReport-2015.ashx. Notably, debt collection lawsuits are notresolved by arbitration, so even if certain types of cases are leaving the courts, debt collection is probably not one of them. In 2009,
the Minnesota attorney general brought a federal lawsuit against a private arbitration company for colluding with creditors to collecton debts, and as a result, private arbitration companies have declared a moratorium on providing their arbitration services for debt
collectors pursuing debts. See: American Arbitration Association, “Notice on Consumer Debt Collection Arbitrations,” http://www.adr.
org; Consumer Financial Protection Bureau, “Arbitration Study: Report to Congress, Pursuant to Dodd-Frank Wall Street Reform andConsumer Protection Act § 1028(a)” (2015), http://purl.fdlp.gov/GPO/gpo57021; State v. National Arbitration Forum (Minn. Dist. Ct.
Hennepin Cty., July 17, 2009).

9

National Center for State Courts, “Appendix I: Problems and Recommendations for High-Volume Dockets” (2016), https://www.ncsc.
org/~/media/Microsites/Files/Civil-Justice/NCSC-CJI-Appendices-I.ashx.

10 Court Statistics Project, “Examining the Work of State Courts: An Overview of 2013 State Court Caseloads” (2015), http://www.
courtstatistics.org/~/media/Microsites/Files/CSP/EWSC_CSP_2015.ashx; Hannaford-Agor, Graves, and Miller, “The Landscape of Civil
Litigation.”
11

Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation”; B.J. Ostrom and N.B. Kauder, “Examining the Work of State
Courts, 1993: A National Perspective From the Court Statistics Project” (Court Statistics Project, 1995), https://www.bjs.gov/content/
pub/pdf/ewsc93-npscp.pdf; National Center for State Courts, “Call to Action: Achieving Civil Justice for All” (2016), https://www.ncsc.
org/~/media/microsites/files/civil-justice/ncsc-cji-report-web.ashx. See the appendix for details on how Pew researchers identified
these findings.

12 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation”; Ostrom and Kauder, “Examining the Work of State Courts, 1993.”
See the appendix for more information on how Pew estimated the debt claims caseloads in 1993 and 2013.
13 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation”; Ostrom and Kauder, “Examining the Work of State Courts, 1993.”
14 Consumer Financial Protection Bureau, “Consumer Experiences With Debt Collection: Findings From the CFPB’s Survey of Consumer
Views on Debt” (2017), https://files.consumerfinance.gov/f/documents/201701_cfpb_Debt-Collection-Survey-Report.pdf. Pew
researchers estimated this figure using data from the study.
15 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation.”
16 Ibid., 33. “… it raises troubling concerns that small claims courts, which were originally developed as a forum in which primarily selfrepresented litigants could use a simplified process to resolve civil cases quickly and fairly, provide a much less evenly balanced playing
field than was originally intended.”
17 Texas Office of Court Administration, “Annual Statistical Report for the Texas Judiciary, Fiscal Year 2018” (2018), https://www.txcourts.
gov/media/1443455/2018-ar-statistical-final.pdf.

31

18 Ibid.
19 Ibid. Pew researchers estimated this figure using data from the report.
20 Alaska Court System, “Alaska Court System Annual Report FY 2013” (2014); Alaska Court System, “Alaska Court System Annual Report
FY 2018” (2018), https://public.courts.alaska.gov/web/admin/docs/fy18.pdf.
21 This analysis is based on states that report the required information on the court’s website. Some states may track this data but notreport it on the website. See the appendix for the list of court websites used in this study.
22 Virginia’s Judicial System, “Caseload Statistics of the General District Courts, January 2018 Through December 2018” (2019); Virginia’s
Judicial System, “Virginia Courts in Brief” (2019), http://www.courts.state.va.us/courts/cib.pdf; Virginia’s Judicial System, “PLN-GCMS
10.01 Caseload Statistics of the General District Courts, January 2018 Through December 2018 Filings” (2018), http://www.courts.state.
va.us/courtadmin/aoc/judpln/csi/home.html.
23 Federal Reserve Bank of New York, “Quarterly Report on Household Debt and Credit” (2010), https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/DistrictReport_Q22010.pdf; Federal Reserve Bank of New York, “Quarterly Report on Household
Debt and Credit” (2016), https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2016Q2.pdf.
24 Urban Institute, “71 Million U.S. Adults Have Debts in Collection” (2018), https://www.urban.org/urban-wire/71-million-us-adults-havedebt-collections; Rickard, “Many U.S. Families Faced Civil Legal Issues in 2018.”
25 B. Adler, B. Polak, and A. Schwartz, “Regulating Consumer Bankruptcy: A Theoretical Inquiry,” The Journal of Legal Studies 29, no. 2 (2000):585-613; Board of Governors of the Federal Reserve System, “Report on the Economic Well-Being of U.S. Households in 2017” (2018),
https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf; J.M. Collins, “Exploring
the Design of Financial Counseling for Mortgage Borrowers in Default,” Journal of Family and Economic Issues 28, no. 2 (2007): 207-26; C.E.
Herbert, Report to Congress on the Root Causes of the Mortgage Foreclosure Crisis (2010).
26 The Pew Charitable Trusts, “What Resources Do Families Have for Financial Emergencies?” (2015), https://www.pewtrusts.org/en/
research-and-analysis/issue-briefs/2015/11/emergency-savings-what-resources-do-families-have-for-financial-emergencies.
27 Consumer Financial Protection Bureau, “Consumer Credit Reports: A Study of Medical and Non-Medical Collections” (2014), https://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medical-collections.pdf.
28 Consumer Financial Protection Bureau, “Consumer Experiences With Debt Collection.”
29 Federal Trade Commission, “The Structure and Practices of the Debt Buying Industry” (2013), https://www.ftc.gov/sites/default/files/
documents/reports/structure-and-practices-debt-buying-industry/debtbuyingreport.pdf; Consumer Financial Protection Bureau, “Market
Snapshot: Online Debt Sales” (2017), https://www.consumerfinance.gov/documents/2249/201701_cfpb_Online-Debt-Sales-Report.pdf.
30 R.J. Hobbs and C.L. Carter, Fair Debt Collection (National Consumer Law Center, 2008). Ch. 1.3.4.2, citing The Nilson Report: Issues 792(July 2003); 806 (March 2004); 835 (June 2005); 857 (May 2006); 880 (May 2007); 901 (April 2008); 921 (March 2009); 946 (April2010); 969 (April 2011); 992 (April 2012); 1019 (June 2013); 1041 (May 2014).
31 C. Albin-Lackey, “Rubber Stamp Justice: US Courts, Debt Buying Corporations, and the Poor” (Human Rights Watch, 2016), https://www.
hrw.org/sites/default/files/report_pdf/us0116_web.pdf; P. Kiel, “So Sue Them: What We’ve Learned About the Debt Collection Lawsuit
Machine,” ProPublica, May 5, 2016, https://www.propublica.org/article/so-sue-them-what-weve-learned-about-the-debt-collectionlawsuit-machine; A. Kuehnhoff and M. Best (staff attorneys at the National Consumer Law Center), testimony before the Joint Financial
Services Committee (May 2, 2019), https://www.nclc.org/images/pdf/debt_collection/testimony-debt-collection-may2019.pdf; L. Stifler,
T. Feltner, and S. Sajadi, “Undue Burden: The Impact of Abusive Debt Collection Practices in Oregon” (Center for Responsible Lending,2018), https://www.responsiblelending.org/research-publication/undue-burden-impact-abusive-debt-collection-practices-oregon.
32 Encore Capital Group Inc., “Form 10-K, 2008” (2009), https://investors.encorecapital.com/financial-information/annual-reports; Encore
Capital Group Inc., “Form 10-K, 2018” (2019), https://investors.encorecapital.com/financial-information/annual-reports; PRA Group Inc.,“Form 10-K, 2008” (2009), https://ir.pragroup.com/sec-filings; PRA Group Inc., “Form 10-K, 2018” (2019), https://ir.pragroup.com/secfilings.
33 Kuehnhoff and Best, testimony; Stifler, Feltner, and Sajadi, “Undue Burden.”
34 Scott v. Illinois, 440 U.S. 367 (1979); Gideon v. Wainwright, 372 U.S. 335 (1963).
35 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation.”
36 T. Feltner, J. Barnard, and L. Stifler, “Debt by Default: Debt Collection Practices in Washington 2012-2016” (Center for
Responsible Lending, 2019), https://www.responsiblelending.org/research-publication/debt-default-debt-collection-practiceswashington-2012-2016; Stifler, Feltner, and Sajadi, “Undue Burden”; C. Wilner et al., “Debt Deception: How Debt Buyers Abuse the Legal
System to Prey on Lower-Income New Yorkers” (New Economy Project, Legal Aid Society, MFY Legal Services, and Urban Justice Center,2010); Legal Services Corp., “Fiscal Year 2019 Budget Request” (2018), 9-10, https://www.lsc.gov/media-center/publications/fiscal-year2019-budget-request; P.A. Holland, “Junk Justice: A Statistical Analysis of 4,400 Lawsuits Filed by Debt Buyers,” Loyola Consumer Law
Review 26, no. 2 (2014): 179-246, https://core.ac.uk/download/pdf/56360427.pdf; M. Spector, “Debts, Defaults and Details: Exploring32

the Impact of Debt Collection Litigation on Consumers and Courts,” Virginia Law & Business Review 6, no. 2 (2011): 257, https://papers.
ssrn.com/sol3/papers.cfm?abstract_id=1975121. This problem is part of a larger trend in civil litigation nationwide. The NCSC found thatattorney representation among defendants declined dramatically across all civil cases from 1992 to 2013, falling from 97 percent to 46
percent in general jurisdiction cases over that span. See: Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation,” 31.
37 Federal Trade Commission, “Time-Barred Debts,” accessed Jan. 22, 2020, https://www.consumer.ftc.gov/articles/0117-time-barreddebts; Rhode Island Gen. Law § 9-1-13; Mississippi Code § 75-3-118.
38 Holland, “Junk Justice.” One Maryland study of lawsuits in which defendants had pro bono legal counsel showed that debt buyers
obtained monetary judgments in only 15 percent of those cases.
39 National Center for State Courts, “Virginia Self-Represented Litigant Study: Outcomes of Civil Cases in General District Court, Juvenile &Domestic Relations Court, and Circuit Court” (2017), https://ncsc.contentdm.oclc.org/digital/collection/accessfair/id/810.
40 Legal Services Corp., “Fiscal Year 2019 Budget Request,” 10.
41 National Center for State Courts, “Call to Action.”
42 American Bar Association, “Steps in a Trial,” accessed Feb. 3, 2020, https://www.americanbar.org/groups/public_education/resources/
law_related_education_network/how_courts_work/steps_in_a_trial2/.
43 B. Yngvesson and P. Hennessey, “Small Claims, Complex Disputes: A Review of the Small Claims Literature,” Law & Society Review 9, no. 2(1975): 219-74, http://doi.org/10.2307/3052976.
44 See for example, Albin-Lackey, “Rubber Stamp Justice”; Legal Services Corp., “Fiscal Year 2019 Budget Request”; Feltner, Barnard, andStifler, “Debt by Default”; J. Fox, “Do We Have a Debt Collection Crisis? Some Cautionary Tales of Debt Collection in Indiana,” Loyola
Consumer Law Review 24 (2011): 355; Holland, “Junk Justice”; M. Spector and A. Baddour, “Collection Texas-Style: An Analysis ofConsumer Collection Practices in and out of the Courts,” Hastings Law Journal 67 (2015): 1427; Stifler, Feltner, and Sajadi, “Undue Burden.”
In 2015, the NCSC found that fewer than 5 percent of cases were adjudicated on the merits of the case. See: Hannaford-Agor, Graves, andMiller, “The Landscape of Civil Litigation.”
45 Wilner et al., “Debt Deception.”
46 E. Harnick, L. Stifler, and S. Sajadi, “Debt Buyers Hound Coloradans in Court for Debts They May Not Owe” (Center for Responsible
Lending, 2016), https://www.responsiblelending.org/research-publication/debt-buyers-hound-coloradans-court-debts-they-may-notowe.
47 Feltner, Barnard, and Stifler, “Debt by Default.”
48 Albin-Lackey, “Rubber Stamp Justice.”
49 R.W. Staudt and P.L. Hannaford, “Access to Justice for the Self-Represented Litigant: An Interdisciplinary Investigation by Designers and
Lawyers,” Syracuse Law Review 52 (2002): 1017.
50 C. Brugnoli (attorney, Brugnoli Law Firm), interview with The Pew Charitable Trusts, June 11, 2019.
51 Federal Trade Commission, “Repairing a Broken System.”
52 New York Appleseed and Jones Day, “Due Process and Consumer Debt: Eliminating Barriers to Justice in Consumer Credit Cases” (2010),
https://www.ftc.gov/sites/default/files/documents/public_comments/protecting-consumers-debt-collection-litigation-and-arbitrationseries-roundtable-discussions-august/545921-00031.pdf; Federal Trade Commission, “Repairing a Broken System”; Albin-Lackey,“Rubber Stamp Justice.”
53 National Association of Professional Process Servers, “Civil Rules Guide for All 50 United States and the District of Columbia” (2017),
https://www.sheriffs.org/sites/default/files/Civil%20Rules%20Guide%202017%20Redux.pdf.
54 See lawsuits against debt collectors for fraudulent service, in J.K. Steinberg, “A Theory of Civil Problem-Solving Courts,” NYU Law Review
93 (2018): 1579.
55 Federal Trade Commission, “Repairing a Broken System.”
56 Albin-Lackey, “Rubber Stamp Justice.”
57 Ibid.; M. Spector, “Litigating Consumer Debt Collection: A Study,” Banking and Financial Services Policy Report 31, no. 6 (2012), http://
debtbuyeragreements.com/wp-content/uploads/2014/04/BFS_0612_1-MBS-053112.pdf.
58 Albin-Lackey, “Rubber Stamp Justice”; Spector, “Litigating Consumer Debt Collection.”
59 See Wilner et al., “Debt Deception”; Holland, “Junk Justice”; C. Ratcliffe et al., “Debt in America: An Interactive Map” (The Urban
Institute, 2017); P. Kiel and A. Waldman, “The Color of Debt: How Collection Suits Squeeze Black Neighborhoods,” ProPublica, Oct. 8,
2015, https://www.propublica.org/article/debt-collection-lawsuits-squeeze-black-neighborhoods.
60 Wilner et al., “Debt Deception.”
61 Kiel and Waldman, “The Color of Debt.”

33

62 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation.”
63 American Institute of CPAs, “Pre and Post Judgment Interest Analysis Matrix,” accessed Oct. 14, 2019, https://www.aicpa.org/
interestareas/forensicandvaluation/resources/economicdamages/prejudgment-postjudgment-matrix.html.
64 M. Baker, “Debt Collectors That ‘Sue, Sue, Sue’ Can Squeeze Washington State Consumers for More Cash,” The Seattle Times, March
23, 2019, https://www.seattletimes.com/seattle-news/times-watchdog/with-a-chance-to-sue-sue-sue-debt-collectors-squeezewashington-consumers-for-more-cash/.
65 Holland, “Junk Justice.”
66 ADP Research Institute, “The U.S. Wage Garnishment Landscape: Through the Lens of the Employer” (2017), https://www.adp.com/
tools-and-resources/adp-research-institute/research-and-trends/-/media/RI/pdf/WageGarnishment_WhitePaper.ashx; ADP ResearchInstitute, “Garnishment: The Untold Story” (2014), https://www.documentcloud.org/documents/1301187-adp-garnishment-report.html.
67 U.S. Code § 1673, Restriction on Garnishment. Garnishments may not exceed the lesser of 25 percent of disposable earnings or theamount by which disposable earnings are greater than 30 times the federal minimum wage.
68 C. Carter, “No Fresh Start in 2019: How States Still Allow Debt Collectors to Push Families Into Poverty” (National Consumer Law Center,2019), https://www.nclc.org/images/pdf/debt_collection/report-still-no-fresh-start-nov2019.pdf. In North Carolina, all wages are
exempt only if the consumer is supporting a family.
69 Ibid.
70 Ibid. The 16 states are Arkansas, Delaware, Georgia, Hawaii, Kansas, Kentucky, Louisiana, Maine, Michigan, Missouri, New Jersey,
Pennsylvania, Rhode Island, Texas, Utah, and Wyoming. At most, these states protect a few special types of accounts, such as college
savings accounts.
71 Kiel, “So Sue Them.”
72 P. Kiel, “Old Debts, Fresh Pain: Weak Laws Offer Debtors Little Protection,” ProPublica, Sept. 16, 2014, https://www.propublica.org/
article/old-debts-fresh-pain-weak-laws-offer-debtors-little-protection.
73 North Carolina General Assembly Session Law 2015-241, S. 7.23.(a), An Act to Make Base Budget Appropriations for Current Operationsof State Departments, Institutions, and Agencies, and for Other Purposes (2015), https://www.ncleg.net/enactedlegislation/sessionlaws/
html/2015-2016/sl2015-241.html; Carter, “No Fresh Start in 2019”; Tennessee Department of Economic and Community Development,
Broadband Accessibility Grant Report–FY 2018-2019 (2019), https://www.tn.gov/content/dam/tn/ecd/documents/broadband/
BroadbandAccessibility-Grants---FY19-Annual-Report.pdf.
74 The Pew Charitable Trusts, “What Resources Do Families Have for Financial Emergencies?”; NORC at the University of Chicago,“Most Working Americans Would Face Economic Hardship If They Missed More Than One Paycheck” (2019), http://www.norc.org/
NewsEventsPublications/PressReleases/Pages/most-working-americans-would-face-economic-hardship-if-they-missed-more-thanone-paycheck.aspx.
75 Missouri Ann. Stat. 511.370.
76 Carter, “No Fresh Start in 2019.”
77 American Civil Liberties Union, “A Pound of Flesh: The Criminalization of Private Debt” (2018), https://www.aclu.org/report/pound-fleshcriminalization-private-debt. The six states that do not have a statute are Alabama, New Mexico, North Dakota, South Dakota, West
Virginia, and Wyoming.
78 See for example A.M. Holsinger, “Analyzing Bond Supervision Survey Data: The Effects of Pretrial Detention on Self-Reported Outcomes”(Community Resources for Justice, 2016), https://www.crj.org/publication/analyzing-bond-supervision-survey-data-effects-pretrialdetention-self-reported-outcomes/.
79 American Civil Liberties Union, “A Pound of Flesh.”
80 Ibid.
81 R.L. Sandefur, “Paying Down the Civil Justice Data Deficit: Leveraging Existing National Data Collection,” South Carolina Law Review 68, no.
2 (2016): 295-309.
82 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation.”
83 Colorado also reports “money” claims for all civil cases (small claims, county, and district court), but its most populous county, DenverCounty, was not included in statewide reporting after 2014.
84 Others provide a higher-level case category—e.g., contracts. Debt collection claims are a subset of contracts, though they are sometimes
reported separately.
85 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation,” 7. “Part of the difficulty stems from the inability of many casemanagement systems to collect and generate reports about civil caseloads.”

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86 Federal Trade Commission, “Repairing a Broken System.”
87 Massachusetts Trial Court, Massachusetts Uniform Small Claims Rules, Rule 2(b).
88 New York State Courts, Uniform Rules for New York State Trial Courts, 22 NYCRR §§ 208.6(h), 208.14-a (2014).
89 Maryland Court, Rules of Civil Procedure, District Court, 3-306 (2016), https://govt.westlaw.com/mdc/Document/
N9C0587909CEAFullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default). Utah also
modified its discovery rule 26(a) in 2011, requiring initial disclosure of documents underlying a debt claim, but only after the defendantfiles an initial answer. A default judgment can still be entered absent that disclosure. See: Utah Courts, Rules of Civil Procedure, 26(a)(2011), http://www.utcourts.gov/resources/rules/urcp/urcp026.html.
90 North Carolina Gen. Stat. § 58-70-115, 150, 155 (2009, 2011), https://www.ncleg.net/EnactedLegislation/Statutes/HTML/ByArticle/
Chapter_58/Article_70.html.
91 United States Census Bureau, “Understanding Census Bureau Address Ranges,” April 15, 2016, https://www.census.gov/newsroom/
blogs/research-matters/2016/04/understanding-census-bureau-address-ranges.html.
92 Conference of Chief Justices and Conference of State Court Administrators, In Support of Rules Regarding Default Judgments in Debt
Collection Cases, Resolution 4 (2018), https://ccj.ncsc.org/~/media/Microsites/Files/CCJ/Resolutions/08222018-Debt-CollectionDefault-Judgments.ashx.
93 Receivables Management Association International, “The Debt Buying Industry” (2015), https://rmassociation.org/wp-content/
uploads/2017/04/White-Paper-The-Debt-Buying-Industry.pdf.
94 Consumer Financial Protection Bureau, Proposed Rule: Regulation F, Debt Collection Practices, 12 CFR Part 1006 (2019), https://www.
consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/debt-collection-practices-regulation-f/.
95 In at least two states—Mississippi and Wisconsin—debts are extinguished when the applicable statute of limitations expires. See:
Wisconsin Stat. Ann. § 893.05 (1979), https://docs.legis.wisconsin.gov/statutes/statutes/893/I/05; Mississippi Code Ann. § 15-1-3(2010).
96 Oregon Laws 625, Sec. 1 (2017), https://olis.leg.state.or.us/liz/2017R1/Downloads/MeasureDocument/HB2356.
97 Receivables Management Association, “Out-of-Statute Debt: What Is a Smart, Balanced, and Responsible Approach?” (2015), https://rmaintl.org/wp-content/uploads/2017/04/RMA_Whitepaper_OOS.pdf.
98 D.J. Greiner and A. Matthews, “The Problem of Default, Part I” (Harvard University, 2015). The study found little difference in theeffectiveness of the two mailings. As of 2019, a subsequent study was underway.
99 See for example J. Greiner, D. Jiménez, and L. Lupica, “Self-Help, Reimagined,” Indiana Law Journal 92, no. 3 (2016): 1119-73; J. Madans,“Experiencing Self-Help in CA Courts” (working paper, Judicial Council of California, 2019); New York Appleseed and Jones Day, “DueProcess and Consumer Debt.”
100 Alaska Court System, “Self-Help Services: Debt Collection Cases,” accessed Aug. 8, 2019, http://courts.alaska.gov/shc/debt/forms.htm.
101 S. Marz (director of self-help services, Alaska Court System), interview with The Pew Charitable Trusts, May 23, 2019.
102 Texas Justice Court Training Center, “When a Debt Claim Case Has Been Filed Against You,” accessed Oct. 29, 2019, https://www.tjctc.
org/SRL/debt-claim.html; Hon. C. Ruckel (justice of the peace, Collin County Justice Court, Precinct 3), interview with The Pew Charitable
Trusts, May 23, 2019.
103 Conference of Chief Justices and Conference of State Court Administrators, In Support of Implementation of Clear Communications andStreamlined Procedures in the Courts, Resolution 5 (2019), https://ccj.ncsc.org/~/media/Microsites/Files/CCJ/Resolutions/07312019Implementation-Clear-Communications-Streamlined-Procedures.ashx.
104 National Association for Court Management, “Plain Language Guide” (2019), https://nacmnet.org/resources/publications/guides/plainlanguage-guide/.
105 See for example J. Greacen, “Remote Appearances of Parties, Attorneys and Witnesses: A Review of Current Court Rules and Practices”(2017), https://www.srln.org/node/1269/report-remote-appearances-parties-attorneys-and-witness-review-current-court-rulespractices; J.J. Prescott, “Improving Access to Justice in State Courts With Platform Technology,” Vanderbilt Law Review 70, no. 6 (2017):
1993-2050; Madans, “Experiencing Self-Help in CA Courts”; R.L. Kourlis and R. Samnani, “Court Compass: Mapping the Future of User
Access Through Technology” (IAALS, 2017), https://iaals.du.edu/publications/court-compass-mapping-future-user-access-throughtechnology.
106 The Pew Charitable Trusts, “Interactive Online Portals Offer Targeted Legal Resources on Demand” (2019), https://www.pewtrusts.org/
en/research-and-analysis/fact-sheets/2019/01/interactive-online-portals-offer-targeted-legal-resources-on-demand.
107 Chief Justice M. Cady, “2019 Condition of the Judiciary” (Iowa Judicial Branch, 2019); Chief Justice N. Hecht, Texas Supreme Court, “In
the State of Judiciary Address, Chief Justice Hecht Calls for Bail Reform, Protecting Guardians, Judicial-Selection Reform,” news release,35

Feb. 6, 2019, http://www.txcourts.gov/supreme/news/chief-justice-delivers-state-of-judiciary-to-texas-legislature/; Chief Justice M.B.
Durrant, “2019 State of the Judiciary,” Utah Courts, Jan. 28, 2019, https://www.utcourts.gov/utc/news/2019/01/28/2019-state-of-thejudiciary-chief-justice-matthew-b-durrant/; Chief Justice M.E. Recktenwald, “State of the Judiciary Speech—2019,” Hawaii Free Press, Jan.
24, 2019, http://hawaiifreepress.com/ArticlesMain/tabid/56/ID/22980/Full-Text-State-of-the-Judiciary-Speech--2019.aspx.
108 Franklin County, Ohio, Municipal Court, “Online Dispute Resolution: Franklin County Municipal Court,” accessed Jan. 17, 2020, https://sc.courtinnovations.com/OHFCMC/home; Utah Courts, “Small Claims Online Dispute Resolution Pilot Project (ODR-West Valley City),”accessed Jan. 17, 2020, https://www.utcourts.gov/smallclaimswvc/.
109 L. Stifler (director, state policy, Center for Responsible Lending), interview with The Pew Charitable Trusts, June 28, 2019.
110 A. Kuehnhoff, “Consumer Protection and Court-Sponsored Online Dispute Resolution in Collection Lawsuits” (National Consumer Law
Center, 2019), http://bit.ly/cons-prot-ODR.
111 Hannaford-Agor, Graves, and Miller, “The Landscape of Civil Litigation”; National Center for State Courts, “Call to Action”; Ostrom andKauder, “Examining the Work of State Courts, 1993.”

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