Pew Report Shows Debt Collection Lawsuits Continue Rising Across Multiple States
A new report from The Pew Charitable Trusts found that debt collection lawsuits continue to increase across several U.S. states, including record or near-record levels in Utah and Alabama.
Using court data compiled by January Advisors, the report found that debt collection litigation has rebounded following pandemic-era declines and, in several states, has surpassed pre-pandemic levels. Researchers said the trend reflects a growing volume of consumer debt cases entering state courts while highlighting challenges consumers face in navigating the legal process.
Utah and Alabama Report Sharp Increases
In Utah, debt collectors filed approximately 76,000 lawsuits in Utah during 2025, representing a 23% increase compared with 2019. According to Pew, Utah’s debt collection filings are on pace to exceed levels last seen following the 2007–09 Great Recession.
In Alabama, approximately 108,308 debt collection lawsuits were filed during 2025, the highest number recorded since statewide data became available in 2010. According to Pew, that total represents 140% of the number of lawsuits filed in 2019, with filings increasing substantially since 2023. The report noted that Alabama recorded the fourth-largest increase among the eight states included in the analysis.
Researchers said debt collection lawsuits commonly involve credit card debt, medical bills, auto loans, consumer finance loans, utility balances, and other unpaid consumer obligations.
Consumer Debt Remains Elevated
The findings come as U.S. household debt continues to grow.
According to the Federal Reserve Bank of New York, total household debt reached $18.8 trillion as of March 31, 2026, including approximately $13.6 trillion in mortgage-related debt.
Outstanding credit card balances totaled approximately $1.25 trillion during the first quarter of 2026, while overall delinquency rates remained relatively stable. The Federal Reserve also reported that student loan delinquencies continue returning to pre-pandemic levels.
Most Debt Collection Cases End in Default Judgments
The Pew report found that approximately 70% of consumers nationwide do not appear in court after a debt collection lawsuit is filed.
In Utah, the figure reached 71%, meaning most cases result in default judgments when defendants fail to respond or appear.
The report also found that fewer than 4% of defendants are represented by legal counsel during debt collection proceedings.
Researchers noted that court procedures can be difficult for consumers without legal representation to understand, contributing to missed deadlines and limited participation in the legal process.
Alabama Data Highlights Regional Differences
The Alabama analysis also found notable differences among counties.
Majority-Black counties, including Greene and Sumter, experienced some of the largest increases in debt collection filings over the past decade. Majority-white counties also reported growth, although at comparatively lower rates in several instances.
The report further noted that debt collection lawsuits accounted for approximately 38% of all civil filings in Alabama during 2025, up from about 25% in 2023.
Pew Recommends Court Process Reforms
To improve participation and fairness in debt collection cases, Pew recommended several policy changes, including:
- Requiring more information about debts before judgments are entered.
- Expanding automatic post-judgment bank account protections.
- Simplifying court procedures for consumers without legal representation.
- Strengthening lawsuit notification requirements to help ensure defendants receive adequate notice.
Researchers said these measures could improve court participation while supporting accurate and efficient resolution of debt collection cases.
Policy Considerations
The report does not recommend changes specific to Utah or Alabama but identifies reforms already adopted in several states that policymakers may consider.
As debt collection litigation continues to rise in parts of the country, the findings underscore ongoing discussions about balancing effective debt recovery with court procedures that promote consumer participation and due process.
