The exchange for the debt economySource: site
Sheree Gooden felt helpless.
She sat in her car crying, reflecting on how the debt she had managed to keep at bay over 15 years holding various roles in banking had piled up after losing her job in 2024. Gooden realized she didn’t have enough money to consolidate the debt or file for bankruptcy.
“I lost my job, I was getting unemployment, bills were stacking up, and then I realized there was no catching up with my past due bills,” she said. “I was completely at a dead end.”
Gooden received a call late last year from a managing attorney at the District of Columbia Bar Pro Bono Center, who helped her find ways to address her debt. But she’s among the lucky few who have received any kind of help.
Lawsuits against consumers filed by creditors and debt collectors have swelled since Covid-19 pandemic protections expired, and they’re poised to continue ticking up as high inflation remains stubborn and consumers lose access to federal health insurance and other benefits. Most people sued over debt don’t get any legal assistance, stacking the deck against them.
“The power imbalance is big between a lawyer and a person who is not legally trained,” said Lester Bird, a senior manager at the Pew Charitable Trusts who researches state and local court practices.
Increasing Debt
Debt collection lawsuits filed in Missouri and Texas state courts were 188% and 177% higher, respectively, in 2025 than in 2019, according to a July study by Pew citing analysis from consulting firm January Advisors.
Municipal courts are also experiencing a surge in debt cases. Suffolk County, Mass., which includes Boston, saw 168% more debt collection lawsuit filings in 2025 than in 2019, the report said.
It typically takes around five years from an initial delinquency for a debt to result in a collections lawsuit. The cases flooding the system now are largely the result of debt that built up after the expiration of pandemic-era assistance such as stimulus payments and mortgage and student loan collection pauses, said David McLendon, a principal consultant and data scientist at January Advisors.
Around a quarter of the cases handled by the DC Bar Pro Bono Center’s Consumer Law Resource Center are now debt-related following a jump in recent years, said Anitra Ash-Shakoor, the managing attorney at the center who initially called up Gooden.
Many people facing debt collection end up with a default judgment after ignoring their collections actions, she said. “The general feeling is, ‘If I can’t afford to pay what I owe, then why bother?’”
Those judgments can result in garnished wages and frozen bank accounts. In New York, debt collectors have as many as 20 years to collect on a default judgment.
Volunteer Lawyers
New York’s civil court system and legal assistance groups in the state are pushing to improve the process for notifying debtors they’ve been sued and to support people who make it to court.
The hurdles confronting debtors were on display one day in July at the Bronx County Civil Court, just steps from Yankee Stadium, where Judge Diomarys Escano-Bell presided over the consumer credit section.
The docket for that day included 11 cases that were processed in about two hours — a relatively light load compared to most days at the court.
Debtors, typically representing themselves, and per diem attorneys working for large debt buyers and banks dotted the courtroom gallery. They would leave the courtroom to discuss potential settlements in the hallway.
A few people were able to secure an attorney through the New York Legal Assistance Group under a Volunteer Lawyer for the Day Program funded by New York’s Office of Court Administration.
The program began in 2010 in response to a flood of financial crisis-era cases, said Daphne Schlick, the director of the NYLAG’s consumer protection unit.
The volunteer lawyers can’t see a case all the way through, but they can provide advice on defenses such as validating debts and contesting whether a lawsuit was properly served, she said.
The NYLAG’s volunteer attorneys are only required to take on five cases per day, she said.
“Most of our attorneys take on more because they care,” Schlick said.
Legal Clinics
New York’s civil courts also have on-site legal clinics for people facing debt collection lawsuits.
In the Bronx, Manhattan, and Staten Island, defendants can visit the Civil Legal Advice and Resource Office, operated by Fordham Law School’s Feerick Center for Social Justice.
The office is staffed largely by retired attorneys, many of whom didn’t work in consumer law during their careers.
“There is dire need here,” said Lynn Barsamian, a retired financial services attorney who volunteers in the office. “People come to us and they’re confused.”
CLARO volunteers, who are overseen by an attorney, go over documents and help prepare filings for people defending themselves, she said.
CLARO can also help people get favorable settlements, said Bob Becker, a volunteer.
“People are so appreciative of the work we do,” he said.
More Needed
Legal assistance in debt collection suits helps collectors by streamlining litigation and avoiding the costs of post-judgment collections, said Donald Maurice, a principal with Maurice Wutscher LLP and a consultant for Receivables Management Association International, a debt buyers trade group.
“Any time that you are able to avoid a court entering a judgment, the consumer benefits,” he said.
Even with the programs set up to help debt collection defendants in New York, less than 3% of those defendants had legal counsel in 2022, a coalition of advocacy groups said in a 2025 report to New York’s chief judge.
Other states and even individual judges have made efforts to boost assistance for pro se defendants, Pew’s Bird said.
But more needs to be done, Bird said.
Volunteer lawyers are “only able to take a small fraction of the cases coming through courts in this country,” he said.
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