How Many Americans Have a Debt in Collections?

Man worried about finances

The average American’s debt load is becoming increasingly delinquent, according to a new study performed by the Urban Institute.

Last month, USA Today reported that more than one third of Americans have a debt in collections. The news source used data collected by the Urban Institute, which analyzed the credit files of 7 million Americans.

According to USA Today, collection attempts usually occur when a debt is so far past due that the account has been closed. It said that this typically happens when a debt is reported to a credit bureau, affecting a person’s credit score.

The study found that 77 million Americans with debts in collection owe an average of $5,200. The debts include credit card bills, child support, medical bills, utility bills, parking tickets or membership fees.

In Washington D.C., borrowers had an average debt of $65,532, with 41.8 percent of people having a debt in collections. In Maryland, the average debt was $76,583, with 36.8 percent of people having debts in collections.

How Can I Eliminate Collections Debt?

You can eliminate several debts through bankruptcy. However, some forms of debt may be non-dischargeable, including student loans, tax debt and any fraudulent or criminal charges. Additionally, through a bankruptcy, collection attempts stop, as an automatic stay goes into effect preventing lawsuits.

To file for Chapter 7 bankruptcy you must be able to pass a “means test” that examines your income and helps you decide if you would be able to afford a payment plan agreed upon through Chapter 13 bankruptcy. Keep in mind, if you are unable to file for Chapter 7 bankruptcy because of eligibility issues, you can always file for Chapter 13 bankruptcy.

A Chapter 13 bankruptcy allows people to pay off debts through a repayment plan, lasting three to five years, approved by a court. If you have any questions about bankruptcy, and how it could help you eliminate collection attempts, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.

Law Firm of Kevin D. Judd

Judd’s Judgment: Nevada has the highest share of people with accounts in collection at 46.9 percent.


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