Top 10 States Struggling With the Heavy Chains of Debt. Part 1

If debt is the money of slaves, a disturbing number of people are living in servitude. Millions of Americans across the fifty states and the District of Columbia are financial distressed with debt past due and in collections. While some regions of the country have more debt bondage than others, no state escapes unscathed.

Roughly one in twenty Americans with a credit file are at least 30 days late on a credit card or other non-mortgage account such as an auto or student loan, according to a new study from Urban Institute. Among people with debt past due, the average amount they need to pay to become current on that debt is $2,258. In McAllen, Texas, 10.1 percent of people with credit files have debt past due, the worst rate in the nation. Approximately 9 percent of people with credit files have debt past due in El Paso, San Antonio, Baton Rouge, and New Orleans.

Making the chains of debt even heavier, more than one in three Americans with credit files have debt in collections, which originates from non-payment of a bill, including events such as failing to make payments on an outstanding credit card balance, not paying medical or utility bills, or even failing to pay a parking ticket. The amount of debt in collections varies from less than $25 to more than $125,000. Among the 77 million people with debt in collections, the average amount owed is $5,178. A debt reported in collections can remain on a person’s credit report until the debt is seven years past due.

Let’s take a look at the ten states where people are in the most financial distress, as ranked by the population that has debt in collections and debt past due.

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