There are complaints that too many lawsuits are being put in place by banks and other creditors seeking a judgment against debtors. However, the number of lawsuits brought by lending institutions may simply reflect the economy we live in where individuals are not paying back what they owe.
To collect on a debt, often a lawsuit will need to be instituted. From the perspective of at least one debt collector, when debtors ignore their obligations collectors have little choice but to file a lawsuit. This does not mean that too many lawsuits are being filed.
Unfortunately, creditors are also finding themselves being sued as well. The California Attorney General has sued JPMorgan Chase for alleged improper practices when it sued 100,000 California debtors between the years of 2008 and 2011. There are many other instances where states are bringing lawsuits against other lending institutions as well.
Any good attorney that works in the area of debt collection and collection of judgments understands that lawsuits filed against debtors need to be followed up in the proper manner. Such attorneys understand that lending institutions need to have the proper paperwork to back up any case, and that these creditors need to follow the rules that the state or federal government have put in place.
Consumer advocacy groups sometimes point to how courts will sometimes grant default judgments to banks and debt collectors. There may be improper debt collection practices occurring, but advocacy groups often rely on anecdotal evidence to back up their claims or even go so far as to suggest that the courts "rubber stamp" judgments for cases that collectors bring. Though groups claim there are faults in the process, too often debtor lacked any real defense as to why they failed to pay their debts or provide a reason why they did not show up in court.
Source: NBC News, "Courts clogged by debt cases, 'rubber stamp' rulings, advocacy group says," by Bob Sullivan, June 5, 2013