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Study Finds 35% of Americans Dealing with Debt Collectors

Michael Rapp Aug. 6, 2014

A new study from the Urban Institute found that over a third of Americans face debt collecting agencies due to unpaid bills, loans, and mortgages. The Institute reports that 35.1% of Americans in the study had an average $5,178 in debt.

The fact that over one third of Americans are facing debt collection may come as a surprise to some, as credit card debt in the United States is at its lowest level in a decade.

The AP story reports that just 2.44% of credit card accounts are overdue by 30 days or more, whereas the 15 year average is 3.82%.

Certain regions of the U.S. have contributed to the high debt rate more than others. The South and Southwest, specifically Texas, Florida, Mississippi, Tennessee, South Carolina, and Nevada contain more consumers facing debt collectors than the rest of the United States.

At the other end of the spectrum are places like Minneapolis, Boston, Honolulu and San Jose, all of which have lower than average debt rates.

In certain areas, such as San Jose, the average debt amount is actually higher than normal ($97,150) due to the extremely high home prices. However, in areas where debt is more common, such as McAllen, Texas, the average person has only $23,546 in debt.

Caroline Ratcliffe of the Urban Institute believes that income levels have much to do with why certain areas struggle more than others to repay debt to collection agencies.

Read the full Urban Institute debt collection report.