Every day, consumers are sued over credit-card balances, personal loans, medical debts, and accounts purchased by debt buyers such as Midland Funding, Portfolio Recovery Associates, LVNV Funding, Jefferson Capital, Cavalry, and others.
And then something surprising happens.
A huge percentage of consumers never respond.
They do not file an answer.
They do not appear at the hearing.
They do not challenge the debt.
They do not ask the creditor to prove anything.
They simply disappear from the court process.
The result is often a default judgment.
A default judgment generally means the creditor wins because the consumer failed to participate—not necessarily because a judge heard witnesses, reviewed competing evidence, and concluded after a contested trial that the creditor proved its case.
And defaults are not rare.
The Consumer Financial Protection Bureau’s December 2025 credit-card market report found that, among surveyed issuers that separately tracked default judgments, more than 72% of judgments entered were default judgments.
Other research has found similarly striking numbers. The National Consumer Law Center reports that the CFPB previously found 74% of surveyed consumers who had been sued on a debt said they did not attend the court hearing, while collectors reported obtaining default judgments in 60% to 90% of the lawsuits they filed.
So why do so many consumers fail to show up?
The answer is considerably more complicated than:
“They know they owe the money.”
In reality, consumers default for dozens of reasons—confusion, fear, lack of notice, inability to afford counsel, work obligations, childcare, transportation problems, misunderstanding the court process, and sometimes the mistaken belief that showing up would not change anything.
Understanding those reasons helps explain not only why defaults are so common, but also why high-volume debt litigation can be economically attractive to creditors and debt buyers.
First: What Is a Default Judgment?
Suppose Midland Funding files a lawsuit alleging that you owe $6,000 on an old credit-card account.
You receive a summons requiring you to respond.
If you file an answer, Midland generally must proceed with the case and establish whatever elements are required under applicable law.
Depending on the jurisdiction and facts, that could involve issues such as:
- whether Midland owns the account;
- whether the balance is correct;
- whether the lawsuit was timely filed;
- whether the records are admissible;
- whether the defendant is the correct consumer;
- whether payments or credits were properly reflected; and
- whether other defenses apply.
But if you never respond, the procedural situation changes dramatically.
The plaintiff may ask the court to enter judgment because you defaulted.
The CFPB defines a default judgment as a ruling in favor of the collector when the consumer fails to respond to the summons or appear in court.
The consumer has effectively surrendered the opportunity to make the creditor litigate the case in the ordinary adversarial process.
Reason No. 1: Some Consumers Never Actually Know They Were Sued
This may be one of the most disturbing reasons for defaults.
A court record may indicate that service occurred even though the consumer never personally saw the lawsuit.
People move.
Mail goes to old addresses.
Roommates or family members receive papers.
Documents get lost.
Consumers may misunderstand something mailed by the court or process server.
And disputes over service of process have long been a recurring issue in consumer debt litigation.
Philadelphia provides a particularly revealing example.
A Pew Charitable Trusts study found that 95% of Philadelphia debt-collection cases that reached judgment ended in default judgments.
In a survey of consumers sued in Philadelphia Municipal Court, 60% said they did not attend their court hearing.
Among those who did not attend, 22% said the primary reason was that they did not know a lawsuit had been filed.
Think about that.
A judgment may eventually affect a person’s wages, bank accounts, or property, yet the consumer may first discover the case only after collection on the judgment begins.
NCLC notes that some consumers learn about default judgments only when wages are garnished or a bank account is affected.
Reason No. 2: Legal Documents Are Intimidating
Imagine you have never been inside a courtroom.
Then a packet arrives.
It says things like:
Plaintiff.
Defendant.
Complaint.
Answer.
Appearance.
Default.
Judgment.
Perhaps it contains statutory language, court rules, formal allegations, and deadlines buried among several pages.
Lawyers read those documents every day.
Most consumers do not.
Some people simply freeze.
They put the papers on the kitchen counter.
They plan to deal with them tomorrow.
Tomorrow becomes next week.
Then the deadline passes.
This is not necessarily indifference.
It is often avoidance caused by fear and uncertainty.
NCLC identifies intimidation and failure to understand how to respond to a summons as significant reasons consumers fail to appear.
Reason No. 3: Consumers Assume There Is No Point in Fighting
One of the most damaging assumptions is:
“I had the credit card, so what is the point of going to court?”
But that question skips several steps.
The issue in a debt-buyer lawsuit is not always simply whether the consumer once had an account.
If the plaintiff is Midland Funding, Portfolio Recovery Associates, LVNV Funding, or another debt buyer, questions may include:
Who owns the account today?
How did ownership transfer?
Is this particular account included in the portfolio being relied upon?
What is the correct balance?
Was the lawsuit filed within the limitations period?
Are the records admissible?
Does an arbitration agreement apply?
Even if the debt is ultimately valid, participating in the case may create opportunities to negotiate a settlement or payment arrangement.
The CFPB expressly advises consumers that responding to a lawsuit does not mean they are admitting that the debt is valid. Responding simply requires the collector to proceed with proving its claim.
Yet many consumers never make that distinction.
They think:
“I used the card. I lose.”
So they do nothing.
Reason No. 4: Consumers Cannot Afford a Lawyer
Debt-collection cases create an obvious economic problem.
Suppose someone is being sued for $3,500.
The person is already struggling financially.
Now imagine telling that person:
Hire a lawyer.
The consumer immediately wonders whether hiring counsel will cost as much as the debt itself.
This creates an enormous representation imbalance.
Debt buyers and creditors routinely appear through attorneys who may handle hundreds or thousands of collection cases.
Consumers often appear alone—or not at all.
NCLC notes that creditor plaintiffs in collection actions are almost always represented by counsel, while consumers are generally not.
That imbalance can make consumers believe they have no realistic chance.
And when the perceived choices are:
pay money I don’t have to hire a lawyer
or
go to court alone against a professional collection attorney,
many choose option three:
avoid the problem.
Reason No. 5: Taking a Day Off Work Is Not Free
Court is often scheduled during business hours.
For an hourly employee, appearing can mean losing wages.
For someone without paid leave, the economic calculation may look like this:
Lose $150 in wages.
Pay for transportation.
Find childcare.
Spend several hours waiting in court.
Possibly still owe the debt afterward.
That can feel irrational when the household is already struggling to pay rent, utilities, groceries, and other bills.
NCLC specifically identifies inability to take time away from work as a barrier to court participation.
Debt collection defendants are disproportionately likely to be people already experiencing financial pressure.
The very circumstances that caused the account to default can therefore make it harder to defend the lawsuit arising from that default.
Reason No. 6: Childcare and Transportation Matter More Than Lawyers Sometimes Realize
Consider a single parent who receives a notice requiring appearance at 9:00 a.m.
School starts at 8:30.
The courthouse is 45 minutes away.
There is no car.
Public transportation requires multiple transfers.
Court may take one hour or four.
Who picks up the child?
Who watches the toddler?
How much does the rideshare cost?
These sound like small logistical questions.
They can determine whether someone appears.
NCLC specifically identifies lack of childcare and transportation as barriers that contribute to consumer defaults.
A court system can technically be open to everyone while remaining practically difficult to access.
Reason No. 7: Some Consumers Are Elderly, Sick, or Disabled
Debt lawsuits do not arrive only for healthy consumers with flexible schedules.
Some defendants are elderly.
Some have significant physical limitations.
Some are hospitalized.
Some care for disabled spouses or relatives.
Some cannot easily travel to a courthouse.
NCLC identifies age and illness among the circumstances that may interfere with participation in collection cases.
The legal system may view failure to appear as a procedural default.
The person experiencing it may see an impossible choice between health obligations and a lawsuit they do not understand.
Reason No. 8: People Mistake a Court Lawsuit for Another Collection Letter
Consumers with delinquent debts may receive enormous amounts of mail.
Collection letters.
Settlement offers.
Account statements.
Notices from new collectors.
Debt-validation notices.
Credit-monitoring correspondence.
Advertisements from debt-settlement companies.
Then a summons arrives.
To someone unfamiliar with litigation, it may look like another threatening collection letter.
That mistake can be catastrophic.
A collection letter can often be dealt with later.
A court deadline cannot.
Once the deadline passes, the plaintiff may move toward default judgment.
The CFPB specifically warns consumers to read lawsuit papers carefully and respond by the required deadline because failure to do so may result in default.
Reason No. 9: Consumers Believe Avoiding Service Will Make the Lawsuit Disappear
Another persistent misconception is:
“If I don’t accept the papers, they can’t sue me.”
People refuse certified mail.
They do not answer the door.
They tell family members not to accept anything.
They believe they are preventing service.
Depending on the jurisdiction, service may still legally occur through other methods.
The CFPB specifically warns that refusing to accept delivery of lawsuit papers is unlikely to be an effective defense if the court considers service valid.
Avoiding the process server may therefore accomplish the exact opposite of what the consumer intended:
The case continues.
The consumer remains uninformed.
And the plaintiff eventually seeks default.
Reason No. 10: Consumers Are Already Financially Overwhelmed
Debt rarely exists in isolation.
A person being sued over a credit card may also be facing:
rent arrears,
medical bills,
auto payments,
student loans,
utility bills,
childcare,
tax obligations,
or other collection accounts.
At some point, psychological triage occurs.
The consumer pays the electric bill because the lights will be shut off.
Pays rent because eviction feels immediate.
Buys groceries because the children need to eat.
The court complaint goes into a drawer because its consequences feel abstract.
Unfortunately, lawsuits operate on deadlines whether or not the defendant has enough mental bandwidth to deal with them.
By the time the consequence becomes tangible, the judgment may already exist.
The Statistics Show How Common Default Really Is
Default is not an occasional failure at the margins of the collection system.
It is central to how collection litigation functions.
NCLC reports that the CFPB’s 2023 analysis of large credit-card issuers found more than 69% of judgments were defaults among issuers separately reporting the data.
The CFPB’s newer December 2025 report places the figure even higher: more than 72% of judgments among respondents separately tracking defaults were default judgments.
Historically, the numbers have sometimes been even more dramatic.
The FTC previously reported estimates ranging from 60% to 95% in different jurisdictions.
Philadelphia’s experience was striking: among collection cases actually reaching judgment, 95% resulted in default.
These are not normal litigation statistics.
They describe a court system in which the defendant frequently never meaningfully participates.
Why Defaults Make Debt-Buyer Litigation Scalable
This matters enormously to companies filing collection suits.
Imagine that every Portfolio Recovery Associates lawsuit required:
five discovery requests,
two depositions,
multiple hearings,
expert testimony,
and a trial.
The economics of suing over relatively small consumer debts would become extremely unattractive.
But that is not what normally happens.
A large percentage of defendants never respond.
That makes high-volume litigation much less expensive.
The collector can file large numbers of substantially similar cases.
Some consumers settle.
Some establish payment plans.
Some contest the case.
But many default.
High default rates also contribute to rapid case disposition. NCLC cites National Center for State Courts research finding that 91% of debt-collection contract cases were disposed of within 180 days.
Fast resolution makes volume possible.
And volume is central to modern debt buying.
A Default Judgment Is Valuable Even If the Consumer Cannot Pay Today
A judgment does not magically create money.
In fact, the CFPB’s 2025 data indicate that non-default judgments tend to produce greater recovery than default judgments.
At 57 months after judgment, surveyed issuers had recovered approximately 58% of balances associated with non-default judgments versus 37% for default judgments.
But 37% is still meaningful.
And judgments may continue generating recoveries for years.
The CFPB found that litigation-related recoveries continue increasing as judgment accounts age.
That gives collectors time.
A consumer who has no collectible income today may later obtain employment.
A bank account may later contain nonexempt funds.
A property lien may become relevant.
The consumer may voluntarily settle the judgment.
Depending upon state law, the judgment creditor may have access to collection methods such as wage garnishment, bank levies, or property liens.
That is why a default judgment can be economically useful even when immediate recovery is limited.
The Irony: Showing Up May Actually Matter
Consumers sometimes stay home because they assume appearing will accomplish nothing.
Available data suggest otherwise.
The CFPB’s finding that recoveries differ between default and non-default judgments demonstrates that consumer participation changes case outcomes in meaningful ways.
Participation can mean:
challenging the plaintiff’s evidence,
asserting defenses,
requesting documents,
raising arbitration,
negotiating settlement,
establishing an affordable payment arrangement,
or sometimes obtaining dismissal.
It certainly does not guarantee victory.
But not participating often removes those possibilities altogether.
Default Does Not Mean the Claim Was Correct
This distinction cannot be emphasized enough.
A default judgment generally reflects a procedural event:
The defendant failed to do something required.
It does not necessarily mean the defendant examined the allegations and agreed with them.
It does not necessarily mean the court heard both sides.
It does not necessarily mean the consumer had no defenses.
NCLC specifically warns that creditors may obtain default judgments even where consumers have legitimate defenses.
That matters particularly in debt-buyer litigation, where questions can arise concerning account ownership, documentation, balances, identity, statutes of limitation, and admissibility.
Why Debt Buyers Benefit From the Information Gap
Large debt buyers and collection law firms understand the process extremely well.
They know the deadlines.
They know the forms.
They know which courts require hearings.
They know how to request default.
They know how to pursue judgment enforcement.
Many consumers experience the process exactly once in their lives.
That creates enormous information asymmetry.
The plaintiff may be represented by a law firm handling thousands of similar cases.
The defendant may be holding a summons for the first time wondering:
“What does this even mean?”
That imbalance helps explain why defaults remain so common.
The Rise in Collection Lawsuits Could Mean Even More Defaults
This becomes particularly important as large debt buyers increase their investment in legal collections.
Portfolio Recovery Associates has been telling investors that increased spending on legal collection activity is intended to generate future cash collections.
Midland Credit Management reports hundreds of millions of dollars per year in legal collections.
Jefferson Capital has disclosed increased upfront court costs associated with consumer litigation intended to generate future recoveries.
As more accounts enter the court system, even a stable default percentage could translate into significantly more default judgments.
Suppose 100,000 lawsuits produce a 70% default rate.
That is 70,000 defaults.
Increase filings to 150,000 while the rate remains unchanged.
Now there are 105,000.
The default rate didn’t need to get worse.
The volume did.
Courts Also Feel the Effects
High-volume collection litigation places tremendous pressure on state courts.
When most defendants fail to participate, cases can move rapidly.
That may be efficient from a docket-management perspective.
But it creates another concern:
How much independent scrutiny should occur before a judgment is entered against someone who isn’t there?
NCLC has advocated requiring creditors to provide documentation establishing the debt before a default judgment can be entered and requiring courts to review that evidence even when the consumer does not appear.
That debate reflects the fundamental tension surrounding default judgments.
Courts need procedures that allow cases to conclude when defendants refuse to participate.
But consumer debt litigation can involve defendants who never understood the lawsuit, never received meaningful notice, or had defenses they did not know how to assert.
The Biggest Mistake: Assuming You Have Nothing to Lose by Staying Home
A consumer may think:
“I don’t have any money anyway. What can they do?”
That may be true today.
It may not remain true.
Once an unsecured debt becomes a court judgment, the creditor may obtain rights it previously did not have.
NCLC warns that judgment debt can potentially expose wages, bank accounts, and other property to collection, depending upon applicable exemptions and state law.
A judgment can also remain relevant long after the original credit-card account has disappeared from everyday memory.
That makes failing to respond one of the most consequential decisions a consumer can make in a collection case.
Simply Showing Up Changes the Equation
There is no guarantee that answering a lawsuit will make it disappear.
There is no guarantee that hiring an attorney will result in dismissal.
There is no guarantee that the debt buyer lacks the documents necessary to prove its claim.
But showing up forces the process to operate differently.
The plaintiff may actually have to prove its case.
Defenses can be raised.
Settlement can be negotiated from a different position.
Questions can be asked.
The account can be examined.
And perhaps most importantly:
The creditor does not automatically win simply because nobody came to the other side of the courtroom.
The Default-Judgment Business Model Depends on Silence
Modern debt collection has become increasingly sophisticated.
Debt buyers use analytics to purchase portfolios.
Digital tools identify consumers likely to pay voluntarily.
Settlement offers can be automated.
Accounts can be routed to collection law firms.
Lawsuits can be filed electronically and monitored at scale.
Yet one of the most powerful components of that sophisticated financial system remains surprisingly simple:
The defendant does nothing.
No answer.
No appearance.
No challenge.
Default judgment.
That does not mean creditors are doing something improper by seeking judgment when a defendant fails to participate.
Courts need rules governing what happens when one side does not appear.
But the extraordinary prevalence of defaults should cause consumers to recognize something important.
The debt buyer may expect that many people will never fight back.
Do not make that decision simply because the process feels intimidating.
Read the summons.
Determine the deadline.
Find out what the plaintiff is claiming.
Ask whether the account is actually yours.
Determine whether the amount is correct.
Consider whether there are defenses or arbitration rights.
And if possible, speak with an attorney before the deadline passes.
Because there is an enormous difference between losing a collection lawsuit after the plaintiff proved its case and losing one simply because you never showed up.
For hundreds of thousands of consumers, that difference is called a default judgment.
And once it enters, getting back to the starting line can be much harder than simply responding in the first place.
This article is for general educational purposes only and does not constitute legal advice. Court procedures, deadlines, service requirements, default rules, statutes of limitation, exemptions, garnishment laws, arbitration rights, and defenses vary significantly by jurisdiction. Consumers who receive a summons or learn that a default judgment has been entered against them should consider promptly consulting an attorney regarding their particular circumstances.
