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Report: Debt collection lawsuits remain prominent in Shelby, Davidson counties

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(The Center Square) – Nearly 200,000 debt collection cases were filed in Shelby County and 112,000 in Davidson County between January 2016 through March 2023, according to data from Sycamore Institute.

The nonpartisan public policy institute looked at the number and type of debt collection lawsuits filed in the two counties, saying the ability to file those lawsuits provide safeguards that prevent the cost of credit from rising more than necessary but that the over- or misuse of lawsuits can involve tradeoffs for courts and defendants.

In Shelby County, 40% of the lawsuits were filed by debt buyers with 19% for medical debt, 15% related to banks and credit cards, 13% for auto debt and 12% from high-interest lenders.

In Davidson, 38% were high interest lenders with 29% from debt buyers, 12% for medical debt, 15% related to banks and credit cards and 6% for auto debt.

The data showed that debt collection lawsuits dropped during and after the COVID-19 pandemic with 18,400 or more lawsuits per year between 2017-2019 dropping to roughly 12,000 per year from 2020-2022.

“Between January 2016 and March 2023, Advance Financial, a Tennessee-based high-interest lender, filed over 17% of cases (in Davidson),” Sycamore Institute wrote. “In 2022, Speedy Cash, another high-interest lender, overtook Advance Financial in filings — accounting for 13% of all debt collection lawsuits. In both time periods, just seven plaintiffs accounted for about half of all debt collection lawsuits.”

Shelby County saw a similar COVID-19 pandemic drop in cases, going from 27,700 cases each in 2018 and 2019 to 18,900 or less in the next three years with 18,100 in 2022.

“Between January 2016 and March 2023, three debt buyers/3rd party collectors — LVNV Funding, Midland Credit Management, and Portfolio Recovery Associates — filed about one-quarter of all debt collection cases,” Sycamore Institute wrote. “In 2022, LVNV remained the top filer, but auto loan lender Credit Acceptance became the second highest filer — making up 10% of all cases.”

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