An analysis of Predatory Debt Collection as a manifestation of the shadow economy within the litigation sphere reveals that this phenomenon—by exploiting legal loopholes, weak judicial oversight, and the inefficiency of mediation institutions—has evolved into a self-reinforcing cycle of violence, threats, and legal framing (manufacturing legal cases). Using a descriptive-analytical method and a criminological approach, and relying on library resources, legislative documents, and official secondary data, this study explains the structural and behavioral dimensions of predatory debt collection in Iran and analyzes the networks of formal and informal actors in the debt collection market. The findings indicate that Predatory Debt Collection not only disrupts the judicial system’s function by saturating courts with mass litigation and eroding judicial capacity but also leads to a decline in the effectiveness of legal norms, the weakening of social capital, and the intensification of legal risks within the business environment. This research demonstrates that the reproductive cycle of this phenomenon is the result of a multilayered interaction between legal, economic, and social factors. Curbing this trend will be impossible without reforming the Code of Civil Procedure, redesigning oversight structures, and strengthening supportive legal services for vulnerable groups. The findings suggest that policymakers should design a comprehensive strategy across three levels—legislation, adjudication, and social security—to prevent the consolidation of informal power patterns within the justice system. Furthermore, the study highlights the necessity of implementing specific practical measures, including the mandatory transparent registration of the debt assignment chain prior to litigation, the establishment of document pre-screening pathways in courts, and the creation of specialized regulatory bodies for debt collection companies.