Wednesday, July 30, 2014

The Geography of Debt

In a first-of-a-kind analysis, the Urban Institute examines how debt varies by state and metropolitan area. The researchers examined 2013 credit bureau data from TransUnion, which has files on almost every American adult (91 percent)—whether they have debt or not. Most do have debt. Of the 91 percent of Americans with a credit file, fully 80 percent have debt.

The Urban Institute researchers looked at the geographic variation in the percentage of Americans with a nonmortgage bill past due (between 30 and 180 days late) and/or in collections (more than 180 days late). Debt in collections could be credit card, medical, or utility bills, even a parking ticket or club membership. They can remain on a credit file for as long as seven years. While only 5 percent of Americans with a credit file have a bill past due, a much larger 35 percent have debt in collections (median amount owed = $1,349). The percentage with debt in collections varies greatly by state and metro area and is concentrated in the South, the Urban Institute reports.

Among states, Nevada is the worst—fully 47 percent of the state's residents with a credit file have debt in collections. In 12 other states (11 of them in the South), the figure is more than 40 percent. At the other extreme, a smaller 20 percent of the residents of Minnesota, North Dakota, and South Dakota have debt in collections.

Among the 100 largest metro areas, the percentage of residents with debt in collections ranges from a low of 20.1 percent in Minneapolis-St. Paul, Minnesota, to a high of 51.7 percent in McAllen, Texas. Other metros with at least 45 percent of residents having debt in collections are Las Vegas (49.2 percent), Lakeland, Florida (47.3 percent), Columbia, South Carolina (45.2 percent), and Jacksonville, Florida (45.0 percent).

Source: Urban Institute, Delinquent Debt in America

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