|by Hadley Malcolm, USA TODAY|
More than a third of the country is in trouble when it comes to paying debts on time; 35% of Americans have debt in collections, according to a study out Tuesday from the
That means the debt is so far past due that the account has been closed and placed in collections. This typically happens after the bill hasn't been paid for 180 days. It also means the debt has been reported to credit bureaus and can affect someone's credit score.
Southern states especially stand out with the highest concentration of people delinquent. In 13 states —
The 77 million Americans with debt in collections owe an average of
The share of delinquent households is "pretty disheartening," says
"This is yet another really bad legacy of the Great Recession that we're just nowhere near climbing all the way out of," he says.
At the same time, a significant number of people with debt in collections aren't aware of the bill and may otherwise have great credit, especially when it comes to medical bills that patients often think were picked up by insurance, says
"The numbers don't necessarily speak to the percentage of households that haven't been paying their obligations," he says of the data.
The research only draws on data from Americans with a credit file, so the researchers say lower-income consumers are underrepresented, and alternative forms of debt such as payday loans aren't included.
When it comes to overall debt levels, most comes from mortgages, which make up 70%, on average, of Americans' debt load. Wealthier states tend to have the highest amount of debt and percentage of debt held in mortgages, but the researchers point out that Americans with higher debt may also have higher incomes and better access to credit.
"Total debt really mimics mortgage debt," says
"We talk about credit and access to credit as a good thing, but debt as a bad thing," she says. "Access to credit can result in productive debt that moves us forward."
Among Americans with credit history, the average total debt load is nearly
McBride cautions that mortgage debt isn't necessarily a negative financial indicator.
The states with the highest share of people with debt in collections are ranked relatively low when it comes to average mortgage debt, the data show. The researchers found mortgage debt is concentrated in high-cost, high-price areas, Ratcliffe says. The top 20% of areas with the highest mortgage debt account for almost half of all mortgage debt.