Most people sued for debt never get their day in court. We can fix that.
When people get sued for debt, most can’t afford a lawyer. In many states, they also can’t simply show up to court to defend themselves. They have to file a formal written answer within tight deadlines, sometimes paying hundreds of dollars in filing fees to participate in their own case. Only then will the court give them a date and time to show up.
As a result, around 70% of people who are sued don’t participate in the lawsuit. And when they don’t show up, they can get a default judgment entered against them. For the millions of Americans sued for debt each year, these judgments give creditors the power to garnish wages, freeze bank accounts, and pursue collection for years.
California shows how high these barriers can get. Not only do people being sued have to file a formal answer to the court, but they have to pay filing fees that range from $225 to $450. Moreover, they have just 30 days to navigate these complex procedural requirements. Unsurprisingly, only 5.5% of Californians sued for debt filed an answer in recent years, leaving the rest vulnerable to a default judgment and the ensuing collection practices.
What would happen if states eliminated the answer requirement and just let people show up to court? Would this procedural change give more people a chance to defend themselves? We examined these question in our new report.
How we did it: Measuring the policy impact
Measuring the impact of procedural reforms is difficult. We can’t run randomized experiments with real court cases. Most states haven’t changed their rules recently, so before-and-after comparisons aren’t available. And we can’t compare states with different requirements because they differ in population, economy, and legal culture.
Minnesota and Indiana offer promising approaches. In both states, debt cases can be filed in different courts with different procedural rules. In Minnesota, cases under $4,000 can go to either small claims court (no answer required) or district court (formal answer required plus a $285 filing fee). In Marion County, Indiana, the same pattern exists for cases under $10,000. Plaintiffs choose which court to use.
This creates what researchers call a “natural experiment.” Are people more likely to show up when their case is filed in small claims versus district court? But there’s a catch: plaintiffs don’t choose randomly. Debt buyers might prefer one court over another. Larger debts might land in district court more often. Cases in different neighborhoods could follow different patterns.
We used propensity score matching to address this problem. The technique works by calculating the probability that each case would be filed in district court based on observable characteristics, such as debt amount, type of plaintiff, neighborhood income, and racial composition. We then matched cases with similar probabilities that ended up in different courts.
We found pairs of cases that looked nearly identical on paper and had similar likelihoods of being filed in either venue, but one ended up in small claims court and the other in district court. Our assumption is that the main difference between these matched pairs was whether a formal answer was required. This isn’t perfect. Unobserved differences might still exist, but it’s informative nonetheless.
Courts without answer requirements see much higher participation
Our analysis in Minnesota and Indiana confirmed what we expected. People sued for debt were 2.1 to 3.7 times more likely to participate when no formal answer was required.
In Minnesota’s matched sample, 41% of small claims cases avoided default compared to just 11% in district court. In Marion County’s matched sample, 48% of small claims cases avoided default versus 23% in superior court.
Our matching process accounted for debt amount, type of plaintiff, and neighborhood demographics. Cases that looked similar had different participation rates depending on whether they required a formal answer.
These results also highlight that answer requirements aren’t the only barrier to participation. Even in courts without formal answer requirements, roughly half of defendants still don’t participate. Work schedules, childcare responsibilities, transportation challenges, fear of court, and other factors keep people away even when the procedural barriers are lower.
Translating our findings to California
Next, we were interested in what these findings could tell us about California’s answer requirement. Could we use these results to simulate what would happen if California removed its answer requirement?
Our dataset of debt lawsuits in California came from the Debt Collection Lab, and covered 14 of the state’s 15 most populous counties for 2021-2023. This is roughly 80% of California’s population. We focused on cases where proof of service was filed, meaning we could confirm defendants were properly notified of the lawsuit.
Our simulation required a key assumption: people who would start participating under the policy change would have similar case outcomes to those who currently file answers. To inform this assumption, we examined California’s current patterns.
The differences were substantial. Among served cases, those without answers had 78% default judgments and 22% dismissals. Cases with answers had no defaults. Instead, 51% resulted in trials or non-default judgments and 49% in settlements. Defendants who participated also faced lower garnishment rates (9% versus 23% among cases with judgments) and longer case timelines (302 days versus 221 days).
These patterns gave us confidence that increased participation would shift outcomes meaningfully. More people engaging with their cases would mean more settlements, more trials, fewer automatic defaults, and fewer garnishments.
Increased participation means better case outcomes
We applied the 2.1x and 3.7x participation increases we observed in Indiana and Minnesota to California’s current 5.5% answer rate. Under the Indiana scenario, participation would rise to 11.6%—roughly 5,000 more people participating each year. Under the Minnesota scenario, it would jump to 20.5%, which means approximately 12,000 more people engaging with their cases annually. (Note: These estimated counts reflect the 80% of the California population covered in our data. See report for more detail.)
With more people participating in their lawsuits, case outcomes would be expected to shift substantially:
- Default judgments would drop from 74% to 62-69%, depending on which scenario materializes. This translates to thousands fewer automatic judgments each year.
- Settlements would increase from 2.7% to 5.7-9.8%. More defendants would have the opportunity to negotiate payment plans that work for their budgets rather than face immediate wage garnishment.
- Trials and contested judgments would rise from 2.8% to 5.8-10.2%. Cases where the debt amount is wrong, the statute of limitations has expired, or the plaintiff lacks proper documentation would get scrutinized rather than rubber-stamped.
- Garnishment rates would decline from 22% to 20.8-21.7% among cases with judgments. Even this modest reduction matters when we’re talking about taking money directly from people’s paychecks.
- Average case length would increase from 225 days to 230-237 days. This represents less than two weeks of additional time.
Disparities may persist without targeted outreach
California civil courts don’t collect race and ethnicity data on defendants, so we used a statistical method that combines surname and location data to estimate probabilities. In general, we found that all racial and ethnic groups would benefit from the removal of the answer requirement in debt cases. But this finding comes with caveats.
First, we didn’t find large disparities in outcomes between racial and ethnic groups to begin with. Currently, participation is low among all groups and case outcomes are not substantially different.
Second, our simulation assumed that removing the answer requirement would increase participation by the same amount across all groups. This was necessary because our samples in Minnesota and Indiana were not diverse enough to estimate different effects by race and ethnicity. While the simulation accounts for differences in current answer rates by group, it assumes the boost from reform would be proportional.
Finally, Latino and other immigrant communities represent a much larger share of California’s population than in Minnesota or Indiana. The challenges facing these groups, such as limited English proficiency, fear of immigration enforcement, or unfamiliarity with court processes, may limit the benefits of procedural reforms unless courts actively address them.
This doesn’t mean California should keep the answer requirement. It means the reform should be coupled with targeted outreach, comprehensive language access services, and community-based legal education to ensure all groups benefit equally.
Exploring the tradeoffs with an interactive dashboard
To help policymakers understand how different participation scenarios would affect California, we built an interactive dashboard. Users can adjust participation rates, explore case outcome projections, and see how reforms might affect court caseloads and case timelines. The tool allows stakeholders to model these tradeoffs using their own assumptions about how defendants would respond to procedural changes.
Our analysis suggests that eliminating the answer requirement could mean that 5,000 to 12,000 additional Californians will engage with their cases each year in the counties we studied. There are implementation details we can’t predict, such as how debt collectors adapt, how effectively courts communicate the new process, and whether community organizations conduct outreach.
But the direction is clear. Removing the answer requirement addresses a significant barrier. The reform would give thousands of Californians a realistic chance to negotiate settlements, raise defenses, and avoid automatic wage garnishment. For a state committed to access to justice, it is a reform worth pursuing.