The system for collecting unpaid debts is broken. One in three American adults had debt in collections prior to the pandemic in 2019 — and during the pandemic, almost half of Americans reported facing serious financial problems. The leading cause for debt collectors to contact consumers for non-loan debt include medical bills, telecom bills, and utility bills — and many times, people are unaware they owe a debt until a collector calls.
The consequences of burdensome debt are clear: consumer debt threatens people’s financial security by making it harder to stay housed, obtain credit, and build wealth. What is far less discussed is this: for 68 million people across America, the average amount in collections was less than $2,000.
Some states and advocates are pioneering ways of fixing the broken system of debt collections litigation. To do this, they must first understand the common ways the system fails individuals, and the state and federal solutions to ensure that debt is legitimate; that defendants know they are being sued; and that judgments do not permanently damage debtors’ financial security.
Join the Aspen Institute Financial Security Program and Pew on Thursday, October 28 at 12:15 p.m. Eastern for a conversation on what we all should understand about the debt collections litigation system, and what we can do to create better outcomes for people across America.
This event is made possible with support from Annie E. Casey Foundation.