Debt Collection Lawsuits Continue to Rise as Filings Surpass Pre-Pandemic Levels
State and local courts across the United States continued to experience a sharp increase in consumer debt collection lawsuits in 2025, according to a new analysis highlighted by The Pew Charitable Trusts. The report comes as inflation, rising living costs, and record levels of household debt continue to place financial pressure on consumers.
Research conducted by January Advisors found that debt collection filings have climbed steadily since the COVID-19 pandemic and, in several jurisdictions, have exceeded pre-pandemic and even Great Recession-era levels.
Debt collection filings continue climbing
Among the states examined:
- Missouri reached 188% of its 2019 filing volume.
- Texas reached 177%.
- Massachusetts reached 153%.
- Alabama reached 140%, the highest level on record.
- Utah reached 123% and is on pace to surpass its post-Great Recession peak.
- North Dakota reached 119%.
- Minnesota reached 111%.
- Virginia reached 98%, nearly returning to pre-pandemic levels.
County-level data showed similar trends. St. Louis County, Missouri, recorded debt filings equal to 198% of its 2019 total, while Suffolk County, Massachusetts, home to Boston, reached 168%.
Pew cited rising consumer prices and growing levels of household debt as contributing factors behind the increase, noting that many consumers have accumulated what researchers describe as “survival debt” to cover everyday living expenses.
Consumers continue to face challenges in court
Pew said debt collection defendants frequently navigate the court system without legal representation. According to the organization, fewer than 4% of consumers sued over debt have an attorney.
The report argues that judgments in debt collection cases can have significant financial consequences, including wage garnishments and liens affecting property or other assets.
The organization pointed to recent state reforms designed to reduce those impacts. Virginia became the 14th state to automatically protect $1,000 in consumers’ bank accounts from post-judgment garnishment without requiring individuals to appear in court. Pew noted that the protection does not eliminate the debt but helps consumers maintain access to funds needed for basic living expenses while repaying obligations.
States increase documentation requirements
The report also highlighted concerns involving debt buyers, noting that consumers may not recognize the company pursuing collection because the debt has changed hands.
According to January Advisors, LVNV Funding filed nearly five times as many lawsuits in 2025 as it did in 2019 across the four states where company-level data was available. The company accounted for approximately 23% of all filings in those states during 2025.
Pew noted that Virginia and Washington enacted legislation this year requiring additional documentation in debt collection lawsuits, including recent account statements, chain of title documentation, original contracts or similar records intended to demonstrate ownership of the debt and the amount allegedly owed.
The laws also require courts to verify the submitted documentation before entering judgment.
However, Pew cited research from California, Connecticut and Minnesota suggesting that courts do not always thoroughly review the required documentation, raising concerns that judgments may still be entered on unsupported claims.
Courts explore AI-assisted review
The report also examined how courts are beginning to use artificial intelligence to review debt collection filings.
The Los Angeles Superior Court is working with Stanford University’s Rhode Center and Legal Design Lab to evaluate AI-assisted review of debt claims. According to preliminary findings cited by Pew, AI-supported human review reduced review errors by 53% while decreasing review time by 33% compared with traditional manual review.
Pew presented the technology as one potential tool to help courts process growing caseloads while improving documentation review.
