Debt in Collections, August 2025: 23% of Adults With a Credit File Had One

Two ways to count

About one in four adults with a credit file had a debt in collections in August 2025.

That is the Urban Institute's count, from a 4% sample of one credit bureau's records: 23% of adults, owing a median of $2,528.

The Federal Reserve Bank of New York counts it differently and gets 4.9%. Its number is the share of people whose credit report shows an account with a collection agency, as of June 2026.

Both are right. The difference is where each one draws the line.

Say a credit card bill goes six months without a payment. The bank gives up and writes it off.

Urban counts that person from that day. The Fed counts them only if the bank sells the debt or hands it to a collection agency.

Among people whose credit report shows a collection agency account, the New York Fed puts the average balance at $1,577.

The collections that stopped showing up

In the first quarter of 2013, nearly 15% of people with a credit report had a collection account on it, the high point of the New York Fed series. In the second quarter of 2026 it was 4.9%.

Part of that change came in one stretch. Between March 2022 and June 2023 the three credit bureaus stopped reporting paid medical collections and medical collections under $500.

Medical bills were the biggest kind of collection on a credit report. In February 2023 the CFPB put them at 57% of all collections on credit reports, and it later found that most medical collection items came off credit files in that window.

The Fed's number was 6.3% at the end of 2021 and 4.6% in the second quarter of 2023.

Whether the bills went away is a different question, and Urban is careful about it. The reporting change "reduced the share of people with medical debt in collections reported on their credit records but not necessarily the share of people with medical debt in collections."

The New York Fed series counts what gets reported, not every bill that is still owed.

The fight moved to the credit report

The Consumer Financial Protection Bureau's public database holds 68,107 complaints about debt collectors received in 2023 and 283,204 received in 2025.

Through September 7 this year it held 220,426, against 181,693 for the same span of 2025. Since January 2022, the highest monthly count was 33,670 in March 2026; the latest complete month, July 2026, had 24,432.

What people complain about has changed as much as how many complain.

In 2018, 12% of debt collection complaints were about communication tactics, which mostly means the phone ringing. In 2025 it was 3%.

In 2018, 5% of complaints named Equifax, TransUnion or Experian as the company at fault. In 2025, 25% did.

The complaint used to be the phone call. Now it is the credit report.

The rest of the pile looks the way it always has. In 2025, 41% said the debt was not theirs to pay, and 23% said the collector's letter did not say enough to tell what it was for.

Where a type of debt was named, credit cards led at 14% and medical debt was 3%. About 55% of the people who complained could not name the type at all.

Three of them, from July 29, 2026, as they wrote it:

"The address is wrong; the telephone number is wrong; the email address is wrong and the signature is wrong."

Complaint 24743569, Alabama, about Meridian Financial Services, after mailing back a dispute form.

"I have been unable to contact the collection agency because none of numbers work and the name keeps changing."

Complaint 24728924, Texas, about Ability Recovery Services, medical debt.

"The account used my old address that I moved out of in XXXX I have never had dish network!"

Complaint 24735009, Utah, about IQOR US Inc.

Companies answered nearly all of these complaints. In 2025 they closed 73% with an explanation and 26% with a fix that was not money, such as correcting or removing the account.

They paid money in 447 cases. Out of 283,204.

A complaint count measures who complained, and the database is smaller than the Bureau's full intake. By its own count the Bureau received about 207,800 debt collection complaints in 2024 and sent 77% of them to companies for a response.

A complaint appears in the database after the company responds or after 15 days.

Where collections come from

A collection starts as a bill the creditor has given up on billing. For credit cards, that is 180 days without a payment.

Medical bills, utility bills, phone bills and rent can go to collections without ever being a loan.

Commercial banks wrote off credit card balances, net of recoveries, at an annual rate of 3.82% in the second quarter of 2026, the same as in Q1 2026, and 2.85% of their card balances were at least 30 days late in the second quarter of 2026, the same as in Q1 2026. Both numbers come from the Board of Governors of the Federal Reserve System of the Federal Reserve System and update on this site when it does.

Households do not fall behind on everything at once.

A Federal Reserve Bank of Philadelphia study published in July 2026 found that "housing payments (mortgage or rent) are prioritized most, followed by auto loans, credit cards, and student loans." Renters and lower-income households, it found, let other payments go further in order to keep paying for housing.

We think that order may matter for the mortgage distress we track. If the house gets paid first, a collection on a card or a medical bill could show up months before a missed mortgage payment, which would make collections an early warning. It is a hypothesis, not a finding: people might also stop paying the mortgage and other bills at the same time.

We cannot show that yet. It needs household-level data on the gap between a first collection and a first missed mortgage payment, and we do not have it.

What a collector may and may not do

Federal law sets the floor. Under the Fair Debt Collection Practices Act and the CFPB's Regulation F, in force since November 30, 2021:

• A collector must send you a validation notice within five days of first contacting you, unless the first contact contained it. The notice has to identify the debt and tell you how to dispute it. (12 CFR 1006.34)
• A collector is presumed to comply with the law at no more than seven calls in seven days about one debt, and no calls for seven days after a conversation with you. Above that, the law presumes harassment. (12 CFR 1006.14(b)(2))
• Calls before 8 a.m. or after 9 p.m. your time are presumed inconvenient. (12 CFR 1006.6(b)(1))
• If you dispute the debt in writing within 30 days of the validation notice, the collector must stop collecting until it mails you verification. (15 U.S.C. 1692g)

The CFPB publishes five sample letters for these situations, including one that asks for more information and one that tells a collector to stop contacting you. Our guide to what to do about debt collectors walks through each one.

State law can add protections on top of these federal ones.

The lawsuit

When a collection is not paid, the creditor or the debt buyer that owns it can sue. If the person sued does not respond, the court enters a judgment against them by default.

Pew counts up to 4.7 million debt collection lawsuits filed in 2022, the last year with complete data.

In 1993 there were fewer than 1.7 million a year. By 2013, Pew found, one civil case in four was a debt case, against one in nine in 1993.

Most end without a fight.

In the places with data, more than 70% of debt suits end in a default judgment, meaning the person sued never responded. About half the cases are for less than $2,000.

Fewer than one defendant in ten had a lawyer in cases studied from 2010 to 2019. Pew's July 2026 update puts it under 4%.

Pew reports that filings dropped during the pandemic and have climbed since 2022.

Missouri's 2025 filings were 188% of their 2019 level and Texas's were 177%.

One debt buyer, LVNV Funding, filed nearly five times as many cases in 2025 as in 2019. It brought 23% of all cases in the four states with data.

A judgment lets the creditor garnish wages or a bank account within state limits. Pew reports that in 35 states and the District of Columbia it can be enforced for at least ten years.

Pew's July 2026 update reports that Virginia became the 14th state to automatically protect $1,000 in a bank account from garnishment.

The last broad count of garnishment is from 2017.

ADP Research Institute found that 7% of the workers in its payroll sample had wages garnished, most often for child support. About one in eight of them had more than one garnishment.

We found no later nationwide count.

Medical debt and student loans since 2022

Medical debt is where the rules have moved the most, in both directions.

The credit bureaus took paid medical collections off reports on July 1, 2022, and medical collections under $500 in April 2023.

In Urban's August 2025 data, 3.2% of adults with a credit file had a medical collection on it. Seven states that now restrict medical debt reporting are left out of that figure.

In January 2025 the CFPB finalized a rule to keep medical bills off credit reports entirely.

A federal court in Texas vacated it on July 11, 2025, at the joint request of the Bureau and the plaintiffs. Medical collections above the bureaus' own thresholds can be reported as before.

States have kept going on their own. In April 2026, Washington's attorney general settled with a collector, Renton Collections, that had not told about 400,000 people of their right to request information about their medical debt. The settlement carries $1.5 million in debt relief.

"There’s a story behind each collection notice—like a neighbor just trying to stay healthy but caught in a downward spiral of debt."

Attorney General Nick Brown, April 13, 2026.

Federal student loan collections restarted on May 5, 2025, after a pause that began in March 2020.

The Education Department started with the Treasury Offset Program, which takes tax refunds and part of federal benefits. It said more than 5 million borrowers were in default and another 4 million were 91 to 180 days late.

By the New York Fed's count, 10.6% of student loan balances were at least 90 days late in the second quarter of 2026, up from 10.16% a year earlier. That series updates on this site when the Fed publishes.

Where it is concentrated

By Urban's count, Louisiana (33.1%), Texas (32.9%) and Georgia (31.7%) have the largest shares of adults with a debt in collections. Minnesota has the smallest, at 12.8%.

Georgia sent the CFPB 210 debt collection complaints for every 100,000 residents in 2025. Vermont sent 10. Georgia's rate was 21 times Vermont's.

Six states are in the top ten on Urban's share, the complaint rate and the State Distress Index, which we publish: Georgia, Louisiana, Mississippi, Nevada, South Carolina and Texas.

Shares from the Urban Institute's Debt in America, credit data August 2025. Complaint rates are our pull from the CFPB Consumer Complaint Database on September 8, 2026, divided by the U.S. Census Bureau's 2025 population estimate. The index rank is read from the State Distress Index file at build time.

A complaint rate depends on how many people were collected on and on how many of them knew where to complain.

Urban's share tells you how many people are being collected on. The complaint rate tells you how many of them went to the government about it.

Help with a collection

Notes on the numbers