A rising number of Utahns are being sued over outstanding consumer debt. Here’s why

Amid ongoing inflationary pressures and tough economic conditions, U.S. consumer debt is at an all-time high, according to federal tracking, with households across the country owing a collective $18.8 trillion as of March 31 this year.

Mortgage loans and other housing-related debt represent the majority of that figure at $13.6 trillion with the balance made up mostly of outstanding balances on credit card accounts, auto loans, consumer finance loans and student loans.

According to the Federal Reserve Bank of New York, U.S. consumers owed $1.25 trillion to credit card issuers at the end of the first quarter of 2026, a level down slightly from the end of 2025 but still up almost 6% from the same time last year. And it’s the highest first-quarter balance since the New York Fed began tracking the measurement in 1999, per a report from the Wall Street Journal.

In its latest report on consumer debt issues, the New York Fed noted overall default rates on that debt have remained relatively unchanged.

“Aggregate household debt levels rose slightly, with modest increases in most debt types offsetting a seasonal decline in credit card balances,” Daniel Mangrum, research economist at the New York Fed, wrote in the May report. “Delinquency transition rates were mostly steady, while student loan delinquencies are returning to pre-pandemic levels.”

But while the New York Fed’s findings reflect little change to the overall national default rate on consumer debt, currently around 4.8%, a growing number of Utahns find themselves facing legal action by debt holders, according to a new analysis from researchers at Pew Charitable Trusts.

Number of debt collectors chasing Utah consumers on the rise

In a report published last Thursday that looked at data compiled by January Advisors, Pew analysts found that debt collectors sued some 76,000 Utahns in 2025, a volume that’s grown by 23% from 2019. The Pew report noted Utah debt collection filings are on track to surpass their most recent peak, hit in the wake of the 2007-09 Great Recession.

Lester Bird, senior manager for Pew Charitable Trusts’ Courts & Communities project, told the Deseret News that while debt collection cases across the country saw a significant decline amid pandemic conditions, case volumes have been on the rise, according to court data from states that make the information available.

“We saw this big dip in 2021, 2022 but by 2024 case volumes were back up to 2019 levels,” Bird said. “We anticipated cases would be up across the country but were surprised to see sharp increases (in 2025 data.) In Utah, the volume is now approaching highs not seen in 15 years. That stood out to us.”

Bird said that it’s difficult to extract accurate origin data from court filings but noted the debt collection efforts track back to a mix of outstanding balances from medical bills, credit card issuers, auto loans, consumer loans and even utility bills.

The portion of U.S. credit card balances that were at least 90 days past due rose to over 13% in the first quarter of this year, the highest level in 15 years, according to the latest New York Fed data. And per an analysis released late last year by the Kaplan Group, a commercial debt collector, over 36% of U.S. households were carrying some form of medical debt and among that group, more than 21% had past due balances.

While the Pew report highlights a group of eight states, seven of which have debt collection case volumes well ahead of 2019 levels, researchers provided commentary and analysis looking at how court processes could be improved. And Bird noted those changes can often lead to better outcomes for consumers alongside higher recovery rates for debt holders.

Among the most surprising data points, perhaps, in the Pew report is that 70% of those who have debt collection actions filed against them don’t bother to show up for court.

In Utah, it’s even slightly higher at 71%. And failing to appear results in default judgments against defendants that can lead to debt collection actions including the seizing of personal assets, garnishment of wages and liens being filed against family homes and other property.

How can the system improve?

Bird said when debt collection efforts end up in the legal system, the consumer-facing part of the process can be daunting and confusing for non-lawyers. The data indicates that only 4% of those who are sued for outstanding debts retain professional legal services to help navigate the actions.

Pew researchers noted in their report that court administrators and policymakers “have critical roles to play in ensuring that every case on the debt docket is valid and that people who are sued have an opportunity to actively and effectively participate in their cases.”

To that end, the report includes a number of policy suggestions that could lead to better outcomes on both sides of the debt collection equation:

• Passing legislation, similar to what has been recently adopted by Virginia and Washington, to ensure that courts and consumers have the relevant information about a lawsuit before a judgment is entered.
• Joining the 14 states (Utah is not among them) that already have automatic post-judgment bank account protections in place.
• Supporting consumers who don’t have lawyers by simplifying procedures — such as by eliminating formal answer requirements and fees — to make it easier and less costly for unrepresented individuals to participate in court.
• Ensuring that people receive adequate notification when they’ve been sued, such as by requiring GPS verification when the consumer is served a lawsuit.