Consumer debt litigation presents a crisis for low-income individuals and for state courts across the country. At the individual level, millions of economically struggling Americans are sued annually by creditors and debt buyers. In an overwhelming number of these lawsuits, estimated at more than 70% in some jurisdictions, those sued do not respond to or defend the suits, sometimes forgoing valid defenses.

As a result, courts routinely enter default judgments against them—without reviewing the merit of the claims—subjecting the individuals to burdensome post-judgment collection actions, crippling fees and interest, onerous payment plans, wage and bank account garnishment, potential imprisonment, and other destabilizing harms. Sometimes people learn they have been sued only when their wages or assets have been seized.

In recent years, states have begun to establish laws and practices to reduce illegitimate case filings and produce fairer treatment and outcomes. See State Leaders Seek More Equitable Processes for Handling Debt Collection Cases. To spur this ongoing progress, the National Center for Access to Justice in 2024 created the Consumer Debt Litigation Index (read about it in this Report) in which NCAJ ranks the states on their progress in establishing as law or practice a set of 24 best policies in nine issue areas.

We invite you to scroll down to learn about your state's progress, see how the states compare, and put the Index to use in your state by discovering policies that your state may either consider adopting or that it may already have adopted but may still need to implement. NCAJ welcomes questions and suggestions about the Index in all respects at ncaj@fordham.edu.

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Benchmarks: Weights and Trends

Number Question Index Weight Issues Number of "Yes" States
1 Does the state respond to the problem of ineffective or fraudulent ("sewer") service in consumer debt lawsuits by:
a. Public Official Service - requiring that a public official (e.g. the court or the sheriff) handle service? or,
b. Court Supplemental Notice - requiring the court to send the defendant, by first class mail, supplemental notice of a new consumer debt lawsuit and deny default judgment if that notice is returned as undeliverable? 		5 Help people know when they are being sued and where to find help. 2
2 Does the state require that notice to the defendant in a consumer debt lawsuit include guidance on where to seek help, including free legal assistance? 5 Help people know when they are being sued and where to find help. 5
3 Does the state provide a simple Answer process by making available an Answer form for use by unrepresented persons in consumer debt lawsuits? 2 Make it easier to respond to a lawsuit. 25
4 Does the state make it easier to respond to consumer debt lawsuits by never requiring defendants to have an Answer notarized before filing? 2 Make it easier to respond to a lawsuit. 48
5 Does the state permit the filing of an Answer in consumer debt lawsuits without charging a filing fee? 5 Make it easier to respond to a lawsuit. 36
6 Does the state require consumer debt complaints to allege all of the following:
a. Name of original creditor;
b. Basis of plaintiff's standing (e.g. chain of ownership of debt); and
c. Itemization of amount sought including debt principal, interest, fees, costs, and other charges to date? 		10 Require the creditor to provide evidence of a valid debt claim. 4
7 Does the state require the following be established before a default judgment can be granted:
a. Proof of Service
b. Validity of debt through authenticated business records (e.g. contract, account statements, or other evidence of obligation); and
c. Amount of judgment through authenticated business records, itemizing damages, court fees, attorneys' fees, and interest? 		10 Require the creditor to provide evidence of a valid debt claim. 6
8 Does the state place the pleading burden on the consumer debt plaintiff to allege in the Complaint the timeliness of each claim, including each of the following:
a. applicable statute of limitations;
b. date that claim accrued; and
c. date that statute of limitations expires? 		2 Require consumer debt collection actions to be brought within a reasonable time of non-payment. 0
9 Does the state require 4-year (or shorter) statute of limitations for the causes of action most commonly used to pursue consumer debt collection: breach of contract (written or oral), open account, account stated, unjust enrichment, conversion, bad check? 5 Require consumer debt collection actions to be brought within a reasonable time of non-payment. 9
10 Does the state prohibit revival of time-barred consumer debt claims, even where defendant makes subsequent payment toward a debt? 2 Require consumer debt collection actions to be brought within a reasonable time of non-payment. 10
11 Does the state prohibit attorneys' fee shifting in consumer debt lawsuits regardless of contractual provision or reciprocity in fee shifting? 3 Prohibit attorneys' fee shifting, and cap interest. 5
12 Does the state cap interest in consumer debt lawsuits (regardless of any contractual provision) as follows:
a. Pre-judgment interest for debt buyers capped at an annual rate of 7% (or less); and
b. Post-judgment interest for all creditors capped at 5% (or less) of the judgment? 		3 Prohibit attorneys' fee shifting, and cap interest. 1
13 Does the state in consumer debt lawsuits require a court order for garnishment and attachment? 5 Reduce the likelihood that consumer debt collection actions leave people homeless, or perpetuate a cycle of debt. 44
14 Does state law require in consumer debt lawsuits that garnishment exemptions for bank accounts are self-executing? 2 Reduce the likelihood that consumer debt collection actions leave people homeless, or perpetuate a cycle of debt. 9
15 Does the state prevent people from becoming impoverished, unhoused, or unable to work by exempting income and assets from attachment and garnishment, as follows:
a. Income of at least $576.92 per week, the minimum to keep a family of four above the federal poverty level, as defined by the U.S. Federal Poverty Guidelines in 2023;
b. Home, regardless of value, or at least the median price of a home in the state; and
c. Car value, state exemption for, at least, the first $15,000 in value? 		5 Reduce the likelihood that consumer debt collection actions leave people homeless, or perpetuate a cycle of debt. 2
16 Does the state require notice to debtor prior to actual garnishment that explains all of the following:
a. potential exemptions?
b. how to challenge the order? and
c. how to assert exemptions? 		5 Reduce the likelihood that consumer debt collection actions leave people homeless, or perpetuate a cycle of debt. 5
17 Does the state prohibit incarceration for contempt for failure to obey a court order to pay all or part of a consumer debt judgment? 5 Eliminate debtors' prison. 21
18 Does the state prohibit arrest and/or incarceration for contempt for failure to appear at a debtor's examination (i.e. a judgment enforcement proceeding), unless the person's failure to appear was willful? 5 Eliminate debtors' prison. 15
19 Does the state provide a lawyer without charge in any contempt or other proceeding in which incarceration is a potential outcome in a consumer debt lawsuit? 5 Eliminate debtors' prison. 26
20 Does the state prohibit relationships (including financial relationships) in which prosecutors lend the authority of their offices to facilitate the activities of debt collectors (e.g. payments by creditors to prosecutors who threaten or bring criminal prosecutions in bad check cases)? 2 Prevent government from undue intervention on behalf of creditor. 1
21 Does the state prohibit use of bail to pay the creditor in all contempt proceedings, or in other proceedings in a consumer debt lawsuit in which incarceration is a possible outcome? 2 Prevent government from undue intervention on behalf of creditor. 0
22 Does the state in consumer debt litigation schedule or otherwise limit financial examinations to no more than once per year? 5 Prevent government from undue intervention on behalf of creditor. 3
23 Do state courts at least annually collect and publish statewide data on number of consumer debt lawsuits? 3 Collect data to improve the system. 4
24 Do state courts at least annually collect and publish statewide data on types of dispositions of consumer debt lawsuits? 2 Collect data to improve the system. 2

Benchmarks by State