By Tahmia Dugger, Court Guide, Illinois Court Help
Debt collection is one of the main reasons people are summoned to court nationwide. Unfortunately, many fail to respond to these lawsuits for multiple reasons that include the inability to take time off work, lack of transportation, insufficient notice from the courts, and having no financial resources to fight it. Research on debt collection lawsuits from 2010 to 2019 that Pew reviewed found that more than 70% of cases resulted in default judgments for the collectors. This is a sign that many people do not respond when they are being sued.
The Consumer Financial Protection Bureau reported in 2017 that only 26% of defendants attended their court hearing. The low percentage of attendance in court has persuaded collectors to start aiming for default judgments. This gives them the authority to seize a person’s bank account, withhold a portion of the individual’s paycheck, or place liens on their assets.
From 2010 to 2019, less than 10 percent of people had a lawyer represent them in a debt collection lawsuit. A director at Pew reported that the cost to hire a lawyer for debt, along with paying court fees, is usually more than the amount of debt owed. Legal aid rarely takes on debt cases unless it becomes a class action lawsuit.
With support from the Illinois Court Help (ILCH) hotline, people can receive information regarding their court case, court forms, and instructions to help them either respond to a civil lawsuit or start one. Also, over 22% of the over 20,800 civil cases our court guides have helped with since 2021 were small claims. So far, ILCH has encountered 4,585 small claims cases and 93.5% of those cases include a self-represented court users.
A selected number of states across the nation have created solutions to ensure that all debt entering the litigation system is legitimate. Recommendations include 1) requiring creditors to show documented proof that establishes validity of the debt owed; 2) encouraging counties to train court clerks to screen out pleadings if the creditors don’t provide the proper information and documents with the complaint; and 3) create a process that judges must follow for reviewing debt collection lawsuits to determine if cases are probable before entering default judgments.
Illinois has done the same through Supreme Court Rule 280.2. Created in 2018, it was a big step forward towards ensuring debt collection cases have merit. Tracking data for debt claims to better understand the extent to which these lawsuits affect communities and creating solutions by adopting procedures from different states can more appropriately support all litigants.