More than 1/3 of Americans have debts and unpaid bills reported to collection agencies

Over 35% of Americans with credit records have debts and unpaid bills reported to collections agencies, according to the Urban Institute, a think tank based in Washington.

Consumers are falling behind on credit cards, hospital bills, mortgages, auto loans, gym memberships, cell phones, and student loans. Collection agencies now employ over 140,000 workers to recover $50,000,000,000 each year. The number of Americans with credit records reported to collection agencies has remained steady, despite the country as whole reducing the overall debt incurred since the 2009 Great Recession.

The challenge with the high number of delinquent debtors is that it negatively impacts the 1/3 of Americans’ credit scores, job prospects, and ability to get competitive loans in the future.

The Urban Institute found that 35.1 percent of Americans with credit records reported to collection agencies closely resembles the 36.5 percent of Americans in collections reported by the Federal Reserve in 2004.

As for geographic locations, Texas residents have some of the highest shares of delinquent credit accounts. Nearly half of Las Vegas residents have debt in collections.

The most common delinquent debt is healthcare (37.9%), student loans (25.2%), and credit cards (10.1%). The major reasons people go into collections are low paying jobs, retirees living on fixed incomes.

For more info, see “More than a third of Americans reported to collection agencies for unpaid bills and debts”.

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