Debt collection cases flood Utah state courts, new data shows

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According to a new report of the Utah Bar Foundation and Pew Charitable Trusts.

These cases often involve individual defendants who owe small amounts of money to companies such as high-interest lenders and credit unions. In 2019, for example, just six plaintiffs accounted for about 50% of all claims in the district. All were collection agencies, which typically buy debts for a fraction of their original amount but sue consumers for the full cost plus collection fees.

The report looked at data on more than 755,000 cases between 2013 and 2019, the last “normal year” before pandemic relief programs like housing assistance and eviction moratoriums took effect.

In many cases, the report found that debtors were being held up to pay far more than they originally owed, due to both legal fees and, in eviction cases, landlord-friendly laws. ‘Utah. He noted that Utah is one of 12 states that only gives tenants three days to pay all overdue rent and fees or move out before their landlord can start paying additional fees – known as triple damage.

While the median amount for tenants facing eviction was $654, the median amount they had to pay after a court judgment was $4,000 – mostly due to treble damages.

During a panel discussion on Tuesday, former Utah Supreme Court Chief Justice Christine Durham said she was struck by the imbalances revealed by the data. She noted that legal fees racked up in district courts suggest it could be less costly for debtors to not show up at all.

“As a judge, I know it’s always best for all parties to participate in a dispute to ensure a fair outcome,” she said. “Our system discourages debtors from participating in their own affairs.”

Pew’s Erika Rickard said the Utah data reflects national trends, which also shows that debt collection cases are becoming the most common type of civil court case. The change went largely unnoticed by heads of state, she said, mainly due to a lack of data. But in Utah, the change has profound implications for taxpayers and consumers.

“This is the first state where we’ve been able to take a close look at the entire statewide system to understand what’s going on behind the courthouse doors.”

The report also included several recommendations for improvement. They include increasing opportunities to settle a case before it goes to court and giving the courts more oversight of the process once a decision has been made.

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