Around 70% of debt lawsuits end in default judgments as collectors flood courts — and most Americans don't even show up

American households are astir $19 trillion dollars successful indebtedness — and indebtedness collectors are going to large lengths to get that wealth backmost (1).

A caller study from the Pew Charitable Trusts recovered that much indebtedness holders are suing debtors successful tribunal to get their wealth backmost (2). Debt lawsuits dropped successful fig during the pandemic, but person been climbing rapidly since.

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Pew tracked 8 states' indebtedness filings from 2019 to 2025. Of those, lone Virginia had less filings past twelvemonth than successful 2019. Missouri had the highest spike since 2019 — with cases astir tripling successful 2025.

It's not a coincidence that indebtedness lawsuits person gone up on with recognition paper delinquencies and surviving costs (3). But these lawsuits thin to beryllium hard for consumers to navigate — and tin travel with hefty consequences for failing to bash so.

Here's what happens erstwhile you're sued for outstanding debt, and what states are doing to marque the process amended for consumers.

You could suffer your location if you don't amusement up to tribunal — galore radical don't amusement up anyhow

Lester Bird, elder manager astatine the Pew Charitable Trusts and pb writer of the report, said that astir 70% of indebtedness lawsuits extremity successful a default judgement connected behalf of the creditor. Not each default judgements are owed to a borrower not showing up successful court, but galore of them are.

"We cognize that radical seldom prosecute successful these cases, and erstwhile they don't the consequences are severe," Bird told the Wall Street Journal (4). "They tin person their wages garnished and slope accounts wiped to zero."

When your wages are garnished, the indebtedness collector tin automatically instrumentality a percent of your paycheck distant whenever you're paid. How overmuch they tin instrumentality depends connected however overmuch you make. For example, if you marque much than $1,256.66 per month, they tin instrumentality up to 25% of your paycheck (5).

The Consumer Financial Protection Bureau says indebtedness collectors tin besides enactment a lien connected your spot if they get a default judgement (6).

Even less borrowers get the assistance of a lawyer erstwhile they're sued by indebtedness collectors, adjacent though they astir apt should. The Debt Collection laboratory recovered that hiring ineligible assistance was associated with implicit a 90% alteration successful likelihood of a default judgement (7). But little than 10% of defendants successful indebtedness cases person ineligible counsel (8).