A Third of Americans Hounded by Collectors

[redtea]

Every third person you pass on the street is being hounded by debt collectors. Except in Dallas, where close to half are not answering the phone.

That's the finding of a study released today by the urban Institute, a Washington, DC-based think tank that examines these issues. The study, titled "Delinquent Debt in America," claims that 35.1% of people with credit records had been reported to debt collectors for an average of $5,178 in debt, with a median balance of $1,349.

The 35% in collections represents 77 million Americans. The study is based on September 2013 records from TransUnion and defines debt as anything that's not a mortgage, including credit card balances, medical or utility bills that are more than 180 days past due. The Urban Institute claims that 5.3% of people with a credit file have a report of past due debt, indicating that they are between 30 and 180 days late on a non-mortgage payment.

That's not necessarily bad news (except, of course, for the debtors and creditors). The percentage of people getting reported to collections is fairly constant with results over the last decade in similar surveys. And the good news, the Urban Institute reports, is that more people are paying off their amounts in total each month, or not accumulating debt at all. Americans have a total debt of $11.1 trillion, down from $12.98 trillion in 2009.

Health care bills make up 37.9% of debts collect, according to another survey by the Association of Credit and Collection Professionals. Student loan debt is another 25.2%, with credit cards taking 10.1%. The remainder of accounts in collections consists of various retail and services, including local government debts owned.

A map of US debt would focus on Texas, where Dallas, at 44.3% of residents, are in collections. Several other Texas cities, including McAllen and El Paso, are over 40%.

Las Vegas has an unusually high number of collectees as well, where 49% are in over their heads. In contrast, citizens from Minneapolis, Boston and San Jose aren't being bothered too much.

The key to the skewed results focused on several states may be the number of retirees in the South and West. With many living on fixed incomes, a medical bill may tilt their fragile balance over the line.

Still, debt is a serious condition at any age. Employers and landlords may use the credit score in their decisions, creating additional hardships for those already struggling.







-RedTea
Independent News for the Right-Minded American





redteanews

[disneysteve]

The study, titled "Delinquent Debt in America," claims that 35.1% of people with credit records had been reported to debt collectors for an average of $5,178 in debt, with a median balance of $1,349.

I heard this report on the news a few days ago. As with most reports like this, I'm not sure I believe it. How can more than 1 in 3 Americans be more than 6 months past due on a debt? That sounds like an outrageously high number. I realize the median balance is pretty small at $1,349 but still, are there really that many people who aren't paying their bills? More than a third of the nation is in collections? Pretty disturbing if it's true. I'd love to see historical data on the trend for this statistic.

[mortgagereport]

Debts and bankruptcy

There was an interesting article in the New York Times yesterday that discussed how many large banks were refusing to write off old debts even after a person had declared bankruptcy. It does remind you, though, that some people are "debt free" only because they have had their debts cleared by the courts. When people cite statistics like these, it's pretty hard to know exactly what they mean by "X% of people".

[Berryskud]

Terrible

This is such a terrible statistics. The trouble is that banks and lending institutions are currently trying to get more and more people to get into debt. Debt that usually they have no hope of repaying.

[PauletteGoddard]

There's a difference between "Every third person you pass on the street is being hounded by debt collectors" and "Every third person you pass on the street is so delinquent on payments s/he's being hounded by debt collectors."

Lots of people who change phone numbers or get a new phone find that those numbers are on debt collection firms' databases. They're hounded until they send letters to the company's principals reminding them of the Fair Debt Collection Practices Act: "show me where my name is on this debt, my signature, address, account number. Just having a debtor's prior phone number doesn't make ME financially responsible. If you can't do any of the above, and you persist in contacting me, I'll be collecting from YOU." Then... the phone calls stop.

[Peaples]

Regardless of what these people are like, thats a sad statistic none the less.