Author Topic: Study: 35 percent in US facing debt collectors  (Read 323 times)

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Offline rangerrebew

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Study: 35 percent in US facing debt collectors
« on: July 29, 2014, 09:51:27 AM »


Jul 29, 9:03 AM EDT


Study: 35 percent in US facing debt collectors

By JOSH BOAK
 
   
WASHINGTON (AP) -- More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday by the Urban Institute.

These consumers fall behind on credit cards or hospital bills. Their mortgages, auto loans or student debt pile up, unpaid. Even past-due gym membership fees or cellphone contracts can end up with a collection agency, potentially hurting credit scores and job prospects, said Caroline Ratcliffe, a senior fellow at the Washington-based think tank.

"Roughly, every third person you pass on the street is going to have debt in collections," Ratcliffe said. "It can tip employers' hiring decisions, or whether or not you get that apartment."

The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The study points to a disturbing trend: The share of Americans in collections has remained relatively constant, even as the country as a whole has whittled down the size of its credit card debt since the official end of the Great Recession in the middle of 2009.

As a share of people's income, credit card debt has reached its lowest level in more than a decade, according to the American Bankers Association. People increasingly pay off balances each month. Just 2.44 percent of card accounts are overdue by 30 days or more, versus the 15-year average of 3.82 percent.

Yet roughly the same percentage of people are still getting reported for unpaid bills, according to the Urban Institute study performed in conjunction with researchers from the Consumer Credit Research Institute. Their figures nearly match the 36.5 percent of people in collections reported by a 2004 Federal Reserve analysis.

All of this has reshaped the economy. The collections industry employs 140,000 workers who recover $50 billion each year, according to a separate study published this year by the Federal Reserve's Philadelphia bank branch.

The delinquent debt is overwhelmingly concentrated in Southern and Western states. Texas cities have a large share of their populations being reported to collection agencies: Dallas (44.3 percent); El Paso (44.4 percent), Houston (43.7 percent), McAllen (51.7 percent) and San Antonio (44.5 percent).

Almost half of Las Vegas residents- many of whom bore the brunt of the housing bust that sparked the recession- have debt in collections. Other Southern cities have a disproportionate number of their people facing debt collectors, including Orlando and Jacksonville, Florida; Memphis, Tennessee; Columbia, South Carolina; and Jackson, Mississippi.

Other cities have populations that have largely managed to repay their bills on time. Just 20.1 percent of Minneapolis residents have debts in collection. Boston, Honolulu and San Jose, California, are similarly low.

Only about 20 percent of Americans with credit records have any debt at all. Yet high debt levels don't always lead to more delinquencies, since the debt largely comes from mortgages.

An average San Jose resident has $97,150 in total debt, with 84 percent of it tied to a mortgage. But because incomes and real estate values are higher in the technology hub, those residents are less likely to be delinquent.

By contrast, the average person in the Texas city of McAllen has only $23,546 in debt, yet more than half of the population has debt in collections, more than anywhere else in the United States.

The Urban Institute's Ratcliffe said that stagnant incomes are key to why some parts of the country are struggling to repay their debt.

Wages have barely kept up with inflation during the five-year recovery, according to Labor Department figures. And a separate measure by Wells Fargo found that after-tax income fell for the bottom 20 percent of earners during the same period.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.
 
http://hosted.ap.org/dynamic/stories/U/US_DEBT_STUDY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-29-00-12-33
« Last Edit: July 29, 2014, 09:52:25 AM by rangerrebew »
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Offline Dexter

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Re: Study: 35 percent in US facing debt collectors
« Reply #1 on: July 29, 2014, 10:50:39 AM »
It'd be interesting to see the average ages of these people in debt.
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Offline massadvj

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Re: Study: 35 percent in US facing debt collectors
« Reply #2 on: July 29, 2014, 11:01:59 AM »
I ave excellent credit but must include myself in this population of people who have had collection agency referrals.  In my case it was an Earthlink account that I had cancelled but they just kept sending me a bill.  When I refused to pay they referred it to a collection agency.  I wonder what percentage of these collections are intenet subscription scams that are like Energizer bunnies.
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Offline Dexter

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Re: Study: 35 percent in US facing debt collectors
« Reply #3 on: July 29, 2014, 11:04:24 AM »
I ave excellent credit but must include myself in this population of people who have had collection agency referrals.  In my case it was an Earthlink account that I had cancelled but they just kept sending me a bill.  When I refused to pay they referred it to a collection agency.  I wonder what percentage of these collections are intenet subscription scams that are like Energizer bunnies.

I have a bill in collections from Verizon that I refuse to pay on principal. I cancelled my account and they charged me for a month I didn't use. I argued with them about it for an hour and they refuse to drop the charge.
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Re: Study: 35 percent in US facing debt collectors
« Reply #4 on: July 29, 2014, 11:19:22 AM »
I have so much debt out there, I will never see a tax refund for the rest of my life. I have child support, state tax due, student loan, credit cards, and on and on and on. Every time I make a dollar, I have 10 people lined up taking a piece of it.
 
The credit cards were insane. They signed me up for what they called 'credit protection'. So I accidentally went over-charge when I bought a soda from a vending machine. This kicked in the 'credit protection', and they charged me $35 for a $1 charge. So what is that, 350% interest? Not APR, but on the spot. Good luck getting me to pay that.
 
The last thing I need is any kind of credit. Don't need it. Don't want it. If I can't buy it, then I don't need it. Also, it acts as a LifeLock credit protection. I have already had scammers trying to take out credit and loans in my name, and they were summarily slapped down. That is just how I like it.
 
 
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Offline Oceander

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Re: Study: 35 percent in US facing debt collectors
« Reply #5 on: July 29, 2014, 03:01:45 PM »
I have so much debt out there, I will never see a tax refund for the rest of my life. I have child support, state tax due, student loan, credit cards, and on and on and on. Every time I make a dollar, I have 10 people lined up taking a piece of it.
 
The credit cards were insane. They signed me up for what they called 'credit protection'. So I accidentally went over-charge when I bought a soda from a vending machine. This kicked in the 'credit protection', and they charged me $35 for a $1 charge. So what is that, 350% interest? Not APR, but on the spot. Good luck getting me to pay that.
 
The last thing I need is any kind of credit. Don't need it. Don't want it. If I can't buy it, then I don't need it. Also, it acts as a LifeLock credit protection. I have already had scammers trying to take out credit and loans in my name, and they were summarily slapped down. That is just how I like it.
 
 

isn't bankruptcy an option?
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Re: Study: 35 percent in US facing debt collectors
« Reply #6 on: July 29, 2014, 11:00:05 PM »
No need for bankruptcy. When you are broke as hell and living hand to mouth, who needs it? That is power of being totally crazy. Nothing can affect you. Because you have no limit to what you may do next. I could just take off, to anywhere I don't even know. Who is going to find me?
 
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You cannot "COEXIST" with people who want to kill you.


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