A shrinking, more expensive workforce under rising financial stress
The U.S. debt collection industry is contracting at precisely the wrong moment.
Over the past six years, the number of employed bill and account collectors has fallen by about 33%, based on BLS Occupational Employment and Wage Statistics. The sharpest drop came between 2023 and 2024, as AI and automation became more efficient at handling routine follow‑up. Because AI mainly handles simple tasks, not nuanced conversations, it can weaken client relationships unless creditors pair it with experienced human collectors.
At the same time, demand for collection services is moving in the opposite direction. Bankruptcy filings have increased every year since their post‑pandemic low. Meanwhile, CFPB debt collection complaints have surged even more dramatically.
The result is what this new report by The Kaplan Group calls the collector crunch: a shrinking, more expensive workforce squeezed against rising financial distress. The clearest way to measure that squeeze is the collector-to-distress ratio, meaning the number of collectors available per 1,000 bankruptcy filings, which has fallen sharply since 2022. The implication is straightforward: fewer collectors are being asked to manage more distressed accounts and disputes.
Key Takeaways
- The collector‑to‑distress ratio has deteriorated by about 47% since 2022, with collectors per 1,000 bankruptcy filings falling from 523 to roughly 277 by 2025.
- Since 2019, the U.S. debt collection workforce has shrunk by about one‑third, with more than 77,000 bill and account collector jobs lost by 2025.
- Over the same period, median collector pay has risen roughly 27%, from $37,000 in 2019 to $47,030 in 2025, reflecting a smaller but more expensive labor pool.
Collector-to-Distress Ratio
The interaction between shrinking supply and rising demand creates a structural capacity gap in debt collection. One simple way to see this is to look at how many collectors are available per 1,000 bankruptcy filings:
From 2022 to 2025, the ratio of collectors per 1,000 bankruptcy filings fell from 523 to 277, a deterioration of 47%. In practical terms, each individual collector is now responsible for a substantially larger volume of distressed accounts, leaving less time per case and less margin for error in both recovery performance and compliance.
State-Level Capacity Gaps
The capacity gap is not evenly distributed across the country. State-level data shows wide variation in the number of collectors relative to business bankruptcy volume, with some states maintaining far more collection capacity per distressed account than others.
The contrast is especially sharp in large-volume states. Texas posts a collector-to-debt ratio of 541.2, North Carolina 524.0, and Massachusetts 479.8, while California stands at 247.1, Ohio at 248.6, and Alabama at just 98.7. These differences suggest that local collection capacity is unevenly distributed, even though many agencies serve clients nationwide. In practice, collectors based in higher‑capacity states can cover accounts across borders, but states with fewer resident collectors relative to bankruptcies may still face tighter labor markets, heavier caseloads per worker, or greater reliance on out‑of‑state agencies.
At the low end, states such as Alabama, Oregon, Mississippi, and Arkansas appear especially capacity-constrained relative to business bankruptcy volume. At the high end, smaller markets such as Alaska, New Hampshire, South Carolina, and South Dakota show much higher ratios, though those figures are shaped by much smaller case counts and should be interpreted with caution.
Collector Workforce Contraction Since 2019
Data from the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) program (SOC 43‑3011) shows a clear and sustained contraction in the collector workforce. From 2019 to 2023 alone, the industry lost roughly 44,960 jobs, a 19% contraction.
The steepest single‑year drop came in 2024, a period when adoption of AI and machine‑learning tools in debt collection accelerated sharply, with TransUnion’s seventh annual Debt Collection Industry Report finding that reported AI/ML use rose from 49% of firms in 2023, to 73% in 2024, and 93% in 2025. By 2025, the cumulative loss since 2019 reached about 77,040 jobs, reducing the workforce by roughly one‑third.
The BLS further projects a 10% decline in collector employment from 2024 to 2034, equating to approximately 17,500 additional jobs lost over the next decade. The roughly 13,700 annual openings expected in the field are projected to come entirely from worker replacement rather than net new job creation. Even with turnover and retirements generating vacancies, the pipeline of new entrants is unlikely to keep pace with rising workload demands.
Rising Wages in a Shrinking Industry
Median pay has increased from $37,000 in 2019 to $44,250 in 2023, $46,040 in 2024, and $47,030 in 2025. Over that span, the median wage rose by roughly 27%. Average annual wages followed a similar path, reaching $46,020 in 2023, $48,370 in 2024, and $49,060 in 2025.
In a shrinking occupation, sustained wage growth typically signals either productivity gains or labor scarcity. In debt collection, both dynamics are present. Automation and AI have improved efficiency, while consolidation has reduced the number of agencies. The number of active debt collection firms declined by approximately 2.1% in 2023 alone, with an average annual decrease of 3.0% between 2020 and 2025. Industry revenue also contracted at a 4.5% CAGR over the same period.
The result is a smaller, more concentrated, and better‑compensated workforce, but one operating with less margin for error as demand increases.
Rising Financial Distress Across the System
Pandemic-era relief temporarily suppressed bankruptcy filings. Since those measures expired, filings have rebounded and continue to climb. The 2025 total represents a 48% increase from the 2022 low. Business-side indicators tell a similar story. U.S. non-financial corporate debt reached $21.55 trillion in Q4 2024, up 27% since 2019. Large corporate bankruptcies hit a 14-year high in 2024, totaling 694 filings. Commercial Chapter 11 filings rose 20% during the year.
Within the B2B credit market, 55% of invoices were paid late in 2023, and 9% of credit sales resulted in uncollectible losses. Delinquency rates on commercial and industrial loans increased from 0.77% in Q3 2023 to 1.28% by Q4 2024.
The Kaplan Group’s analysis of 630,012 CFPB complaints (2021–early 2026) highlights a sharp increase in consumer disputes. In 2024 alone, approximately 207,800 debt collection complaints were filed—nearly double the 109,900 recorded in 2023. The peak month, September 2025, saw 26,758 complaints.
When Capacity Becomes a Relationship Risk
In a capacity‑constrained, AI‑driven environment, the bigger risk now is what happens to relationships during collections. When teams are short‑staffed, they lean more on automated outreach and have less time for the conversations that really need a human.
AI handles simple tasks well, like sending reminders or confirming balances. It struggles with nuance and emotion. If too many accounts go through bots and scripts, collections can feel cold or rigid, especially for long‑time customers and key B2B clients.
In that situation, a capacity gap turns into a relationship gap. Fewer human collectors and more automation mean fewer chances for someone to listen, adjust, and find a workable solution. Creditors who rely mainly on automation may move faster in the short term but risk losing future business.
Creditors who partner with strong agencies and protect human time for complex or high‑value accounts can use AI more safely. Automation handles the easy follow‑up, while experienced collectors focus on the cases where tone, timing, and judgment matter most for both recovery and retention.
Methodology
Employment and wage data are sourced from the Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) program for SOC 43‑3011 (Bill and Account Collectors), covering national and state-level estimates from May 2019 through May 2025. National full‑time employment figures used for some ratio calculations are supplemented, where noted, with estimates from the Current Population Survey (CPS).
For national trends, bankruptcy data are drawn from the U.S. Courts Bankruptcy Filings Statistics, using 12‑month periods ending December 31. For the state‑level map, business bankruptcy counts are taken from the U.S. Courts series “Bankruptcy Cases Commenced, by State” for the 12‑month period ending March 31, 2026, to align with the most recent available state data. State collector‑to‑debt ratios are calculated as the number of bill and account collectors per 1,000 business bankruptcy cases in each state over that period.
CFPB complaint data come from The Kaplan Group’s analysis of 630,012 records in the CFPB Consumer Complaint Database (2021–early 2026), supplemented by the CFPB’s 2024 Consumer Response Annual Report for annual totals and category-level breakdowns. Commercial debt and delinquency indicators are sourced from the Federal Reserve’s Financial Accounts of the United States and Epiq AACER bankruptcy filing data. Industry structure and revenue trend estimates (agency counts, market size, and CAGR) are drawn from IBISWorld.
All percentage changes, collector‑to‑filing ratios, and state‑level collector‑to‑debt ratios are calculated directly from these primary sources by The Kaplan Group.