The New York Times recently reported what many of us in consumer law have been seeing firsthand: debt collection lawsuits are rising again, surpassing pre-pandemic levels. This means millions of Americans are being pulled into courtrooms over credit card bills, medical debt, or loans, often for amounts under $3,000. NYTimes Article
At Guardian Litigation Group (GLG), we understand how overwhelming this can feel. A court summons in the mailbox brings fear, shame, and confusion. But here’s the truth: you are not powerless, and you are not alone. With the right steps, you can push back, demand proof, and in many cases prevent unfair judgments from upending your finances.
Lawsuits Surge Nationwide
According to the January Advisors analysis cited by the NYT, debt lawsuits dropped during 2020–2022 when stimulus checks and court closures gave families breathing room. But now:
- Filings are climbing — In states like Connecticut, Minnesota, North Dakota, and Texas, filings are back to pre-2020 levels.
- Debt buyers dominate — Companies like LVNV Funding, who purchase overdue accounts for pennies, have tripled their filings since 2019.
- Automation plays a role — Researchers believe artificial intelligence is enabling bulk lawsuits to be filed faster than ever.
This isn’t just numbers. Pew Charitable Trusts estimates 4.7 million debt collection lawsuits were filed in 2022, and the trend has accelerated since. Behind each filing is a family struggling with higher costs, thinner budgets, and more reliance on credit cards.
Why So Many People Lose by Default
The NYT highlighted a painful reality: most consumers don’t respond, and about 70% of debt cases end in default judgment. Why?
- People don’t recognize the name of the company suing, since debts often change hands.
- Defendants can’t afford or find legal help.
- Some states even charge fees just to file a response.
- Notices are confusing, and deadlines are short.
When you don’t respond, creditors can garnish wages, freeze bank accounts, or place liens on property. In some states, missing a post-judgment hearing can even result in arrest warrants.
Real-World Example: Carlos’ Story
The Times shared the story of Carlos Banuls, a Virginia engineer sued by LVNV Funding for less than $3,000. Like many, Carlos didn’t recognize the company’s name. He showed up to court anyway. When LVNV failed to provide proof that it owned the debt, the judge postponed the case. Eventually, with legal help, the lawsuit was dropped. Carlos even turned the tables, filing his own lawsuit alleging violations of debt collection laws.
This story shows the power of engaging rather than ignoring. Simply showing up, asking for proof, and getting help can change the outcome.
What To Do If You’re Sued by a Debt Collector
If you’ve been served with a lawsuit, here are the steps GLG recommends:
- Open every notice immediately
Deadlines matter. Missing them often equals losing. - Check who is suing you
If it’s a debt buyer, demand proof they legally own the debt. - File a response (Answer)
Even if you owe something, filing prevents an automatic default. - Ask for documentation
Collectors must prove the amount owed, the original creditor, and the chain of ownership. - Explore exemptions
Some income (Social Security, disability) and assets are protected by law. - Seek legal help
Guardian Litigation Group can evaluate defenses, negotiate, or challenge improper suits. Legal aid and bar associations may also offer support.
Where the System Needs Reform
The NYT rightly pointed out that the system often favors collectors. GLG supports reforms like:
- Requiring process servers to use technology to confirm delivery of lawsuits.
- Ensuring lawsuits include the original creditor’s name.
- Requiring courts to verify debts before granting judgments.
- Expanding free or low-cost access to legal counsel in debt cases.
Moving From Fear to Control
The rise in debt lawsuits doesn’t have to mean a rise in financial ruin. Knowing your rights and taking action can stop collectors from winning unfairly. If you’re sued, don’t freeze. Respond, demand proof, and seek guidance.
Guardian Litigation Group is here to stand with you every step of the way by protecting your rights, pushing back against aggressive collectors, and giving you a path forward.
If you’ve been sued by a debt collector, or fear it may happen, reach out to Guardian Litigation Group for a free case evaluation. We’ll explain your options, help you respond, and fight to protect your income and your future.
FAQ (People Also Ask)
What should I do if I don’t recognize the company suing me?
That happens more often than you think. Debts are frequently sold to third-party buyers who operate under names you’ve never seen. Start by checking your credit report and any old correspondence to confirm whether the account looks familiar. Then, in your court response, demand proof of ownership, including the complete chain of assignment from the original creditor to the current collector. If they cannot produce it, the case may be dismissed. A lawyer-backed firm like Guardian can file motions to compel documentation and challenge missing links in that chain.
Can debt collectors sue me for medical bills, and are there special protections?
Yes, medical debt can lead to lawsuits, but it’s a bit different from credit card or personal loan cases. Medical debts are often fragmented across billing departments and third-party vendors, which means the paperwork is notoriously messy. Some states now limit how medical debt can appear on credit reports or how soon it can be sent to collections. If you’re sued, request itemized billing records, insurance payments, and proof of what you actually owe. Often, those gaps tell a story that favors the patient.
Could I ever be arrested over an unpaid debt?
You cannot be arrested simply for owing money, but you can face a warrant if you ignore a court order related to your case, especially a post-judgment “debtor’s exam.” That hearing is meant to review your finances, not punish you.
Do I really need a lawyer to defend myself, or can I represent myself?
You can absolutely represent yourself, and some people win that way, but debt collection law has traps. Collectors count on consumers missing deadlines or not knowing procedural rules. A lawyer-backed debt defense team knows how to demand discovery, file motions, and negotiate from a position of strength. Having legal counsel can also stop harassing calls, prevent wage garnishment, and sometimes even get cases dismissed before trial.
Can I negotiate a settlement after being sued, or is it too late?
It’s rarely too late. Even after a lawsuit is filed, creditors often prefer a settlement to a drawn-out case. The key is to get any deal in writing and confirm the case will be dismissed once paid. A skilled legal team can negotiate lower balances, freeze interest, and ensure the agreement is enforceable. Settling directly without guidance can leave you vulnerable if the collector files again or sells the remaining balance to another buyer.
How long do collectors have to sue me, and what resets the clock?
Each state sets its own statute of limitations, typically three to six years for most unsecured debts. But be careful; making a small payment or even acknowledging the debt in writing can restart the clock. Before paying anything, get advice. Guardian can determine whether the debt is “time-barred,” meaning the collector no longer has the legal right to sue.
Do debt buyers have to show the original contract and account history?
Yes, but they often don’t. To win, a collector must prove you agreed to the account, show accurate records of charges and payments, and document every transfer of ownership.
What types of income and assets are protected from collection?
Federal law shields Social Security, VA benefits, disability payments, and certain retirement funds. Many states expand those protections to include child support, public assistance, or a portion of your wages. Even if a creditor gets a judgment, they cannot legally take exempt income. A consumer protection attorney can help identify what in your situation is fully protected before any garnishment starts.
Your Legal Response
The surge in debt collection lawsuits reveals more than a financial trend; it exposes a justice gap that leaves too many people unrepresented and unheard. The numbers are daunting, but they do not have to define the outcome. Responding, asking for proof, and getting proper guidance can turn the tide in a case that might otherwise end by default.
At Guardian Litigation Group, we believe that fairness should not depend on who can afford to fight. Every consumer deserves the chance to tell their story, challenge errors, and reclaim control over their financial future.
If you have been sued or fear you might be, reach out before you assume there is no way forward. You have rights. You have options. And with the right support, you have a path back to stability.
The information provided in this blog article is for informational and entertainment purposes only and should not be construed as legal advice. It is not intended to create, and does not constitute, an attorney-client relationship. Every legal situation is unique, and readers should consult a licensed attorney for advice specific to their circumstances.