The COVID-19 pandemic's drastic impact on the economy could accelerate the number of debt collection lawsuits, a case category that's already seen growth this decade, according to a new report.

Debt cases have skyrocketed by 88% in Texas district and county courts in the past five years, but the Lone Star State is just one example of a trend playing out nationwide.

Debt case numbers more than doubled from 1.7 million in 1993, which amounted to 12% of all civil cases that year, to 4 million in 2013, which was 24% of all civil litigation that year, according to a research report by The Pew Charitable Trusts. The rising case numbers and lopsided odds have prompted recommendations for reform in the report.

"As the COVID-19 pandemic continues to shutter businesses and disrupt the national economy, the number of debt collection lawsuits may continue to grow," said a statement by Erika Rickard, director of the civil legal system modernization project at Pew. "This coming wave presents a critical opportunity for court leaders and other policymakers to take action to ensure that all parties in state civil courts have the chance to be heard and receive a ruling based on the facts."

The Pew report examined court data on debt lawsuits in 12 states and determined that debt cases were the most common type of civil lawsuit in Texas, Virginia, Alaska, Arkansas, Colorado, Missouri, Nevada, New Mexico and Utah, according to a news release.

The debtors who are facing the increasing numbers of lawsuits often go it alone in court—less than 10% hire attorneys—or they never even answer the lawsuit, then get slapped with default judgments.

'More than doubled'

The study was hampered by the fact that the majority of states do not have great data on their civil legal systems. For example, 38 states didn't have information on debt claims in their courts. Pew found that Texas is the only state reporting details on all types of cases, and case outcomes, in all its courts.

"In Texas, the only state for which comprehensive statewide data are available, debt claims more than doubled from 2014 to 2018, accounting for 30% of the state's civil caseload by the end of that five-year period," according to the report.

Read more: Civil Litigation Is Up in DFW Region, With Some Practices Booming More Than Others

The rise was even greater when looking only at Texas justice courts that handle small claims. They saw a 140% increase in debt cases from 2014 to 2018, the report said.

Having clear data has allowed Texas to see the rise of debt cases in the state, said a statement by Texas Supreme Court Chief Justice Nathan Hecht.

"The shifting landscape of cases resolved in civil courts requires us to look closely at the way we handle these cases," said Hecht, who also serves as president of the Conference of Chief Justices.

What to do?

The Pew report included some recommendations for states to improve how their courts handle debt cases.

• First, the report said that courts should better track the numbers of debt cases.
• States need to review their policies and court rules to determine how they can make sure that both creditors and debtors get to present a case effectively.
• Courts can also get better if they use modern techniques to get information on procedures to all parties. For examples, using online processes is more accessible to people who do not have attorneys, said the report.

Read the report: