Lawsuits filed by debt collectors over unpaid credit-card bills and other outstanding debts reached their highest levels in years in 2025, according to a report released Thursday by the Pew Charitable Trusts. The increase continues a trend that began in 2024 and has now surpassed pre-pandemic figures in several states and metropolitan areas.

The filings represent a final effort by creditors or debt-buying firms to recover money from consumers who have typically fallen behind on payments by more than four months. Rising inflation and persistently high interest rates have contributed to consumers accumulating more debt, with many struggling to keep up with their obligations.

Pew’s report examined court records from eight states that publicly track debt-collection lawsuits: Massachusetts, Minnesota, Missouri, North Dakota, Texas, Utah, Alabama, and Virginia. In most of these states, the number of cases has steadily risen for several years. Missouri experienced the largest surge, nearly doubling to 121,572 cases last year compared to 2019. Texas followed with a 77% increase, reaching 515,371 lawsuits over the same period. The only exception was North Dakota, where filings declined slightly between 2024 and 2025.

Debt-collection suits are frequently brought by companies that purchase delinquent debts from original creditors such as banks, credit-card issuers, and healthcare providers at a fraction of their value. The majority involve unpaid credit-card balances and medical bills. Lester Bird, the report’s lead author and a senior manager at Pew, noted that roughly 75% of these cases concern debts under $4,000.

The report highlights that about 70% of defendants in these suits do not appear in court, often due to lack of legal representation or unawareness of the lawsuit. This typically results in default judgments favoring creditors, which can lead to wage garnishments, liens on property, or seizure of personal assets.

Pew is advocating for reforms to make the legal process more transparent and accessible for defendants, including clearer information about who is filing the claims and guidance on how to respond.

David McClendon, a researcher with January Advisors who helped analyze the data, described the rise in debt-collection lawsuits as “a lagging indicator” of the financial pressures facing many Americans. Another factor may be that debt-collection companies increasingly view court action as an effective and profitable means of recovering debts amid rising consumer borrowing.

Data from the Federal Reserve Bank of New York shows that U.S. credit-card balances totaled $1.25 trillion in the first quarter of 2026, marking the highest level for that period since the Fed began tracking this measure in 1999.