According to the Chicago Tribune, more than 77 million Americans have delinquent debt. A third of Americans with credit have failed to pay a bill when it was due, missed a payment on a credit card, or in some other way have not been able to maintain a debt, a study released Tuesday by the Urban Institute and Encore Capital Group's Consumer Credit Research Institute.This is actually roughly the same result as a 2004 Federal Reserve study.
USA Today reports that the Americans with delinquent debt owe an average of $5,400. The amount includes credit card bills, medical bills, and other forms of consumer debt. The south leads the nation in the numbers of people with past due debt with New England have the least amount of people who are in arrears.
The persistent high level of people who are in over their heads in consumer debt is a lasting legacy of the Great Recession. People who find themselves out of work and whose unemployment insurance is inadequate to pay the bills often find themselves using credit cards to try to bridge the gap. But often, when people are out of work for a significant period of time, those credit card balances max out and the minimal payments balloon. Add to that some unexpected medical crisis and often it boils down to a choice between keeping the lights on and food on the table and paying the credit card balance. Defaulting on one’s credit card becomes the least bad choice, even if it does lead to bankruptcy.
For more information contact us.
