Debt Collection Lawsuits Surge Past Pandemic Levels

The debt collection moratorium during the pandemic is over. Business lawsuits over unpaid consumer debts increased in both 2024 and 2025, according to January Advisors.

These lawsuits are increasing all over the country, and in some areas lawsuit filings are higher than they were before the pandemic. Why the uptick in debt collection lawsuits?

One reason is the end of financial assistance issued during the pandemic. Stimulus payments and student loan payment pauses provided consumers with financial relief and helped boost consumer spending during the period of financial instability.

With that assistance gone, consumers are left to manage their finances on their own with some struggling to pay creditors, falling behind on payments, and eventually facing legal action. 

A small number of debt collectors, including LVNV Funding, are leading the charge in debt collection lawsuits. LVNV Funding case volume has increased by 350% since 2019, according to January Advisors.

LVNV also was actively suing consumers for unpaid debts during the pandemic at a time when other plaintiffs dropped their court filings. 

According to a recent press release from the National Consumer Law Center, the Consumer Financial Protection Bureau (CFPB) began a process of making it more difficult for people to file complaints against credit reporting agencies and possibly debt collectors and banks.

Debt collection, in particular, is a big source of consumer complaints at the CFPB.

Debt collection is the second-most common source of complaints to the CFPB, said April Kuehnhoff, senior attorney at the National Consumer Law Center.

“The number of consumer debt collection complaints is exploding, increasing more than four times in the span of two years, from 2023 to 2025,” said Kuehnhoff.

“We need a CFPB that can help consumers resolve their complaints, enforce consumer protection laws, and supervise the debt collection industry — not throw up artificial barriers to consumers calling on the federal government for help.”

The BadCredit.org industry news team reached out to the CFPB but was told on background that consumers with complaints with credit reporting agencies needed first to file complaints with those agencies before filing a complaint with the CFPB.

Gwyneth Borden, Founder and Chief Executive Officer at Remynt, said she believes one reason for the uptick in debt collection complaints is that Gen Zers and millennials don’t like phone calls.

Younger generations, especially millennials and Gen Z, tend to ignore incessant phone calls because they’re not used to them, Borden said.

“The younger generations have different standards around how they define harassment, how they define how people should be treated,” said Borden.

A recent analysis by The Kaplan Group of over 630,000 debt collection complaints filed between 2021 and early 2026 shows that complaint activity peaked in September 2025 with 26,758 complaints in a single month, said Dean Kaplan, Chief Executive Officer of The Kaplan Group.

Approximately 46% of all debt collection complaints involve attempts to collect debt not owed, he said.

Consumers also may be struggling with more than one debt at the same time.

“Our analysis shows complaints span multiple debt types, including other debt (19.1%), credit card debt (18%), medical debt (6.8%), and auto debt (3.5%), so it is common for a single person to have several legitimate issues at once,” Kaplan said.

Where do debt collection complaints take place? Roughly 65.8% of complaints are in the top 10 states of Texas, Florida, California, Georgia, New York, Illinois, Pennsylvania, North Carolina, New Jersey, and Virginia, according to The Kaplan Group. 

Consumer complaints against debt collectors have increased, and debt collectors are filing more lawsuits against consumers with unpaid debts. The top 10 states for debt collection complaints account for almost two-thirds of all debt collection consumer complaints.

A handful of debt collection companies are leading the increase in debt collection lawsuits.