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The number of filings is back above 2020 levels as prices rise and people rely more on credit cards, an analysis finds. But many borrowers don’t respond to the suits and lose by default.
By Ann Carrns
States are seeing an increase in debt collection lawsuits, which can lead to drastic financial consequences for consumers.
Collection lawsuits — filed by businesses or debt collectors when borrowers fail to pay a debt, like a credit-card bill or a medical bill — declined during the pandemic years of 2020 through 2022. But they rose sharply in 2023 and 2024, according to a recent analysis of seven states and several large metropolitan areas.
