Special Report

10 States Struggling With Delinquent Debt

10. Florida
> Share with debt in collections: 41.0%
> Avg. debt in collection: $6,396 (7th highest)
> Median household income: $45,040 (11th lowest)
> Poverty rate: 17.1% (17th highest)

In 2013, 41% of Florida residents with credit history had delinquent debt, the 10th highest percentage in the nation. Floridians also had one of the highest debt burdens in the nation, at $6,396 on average. One of the largest issues facing many residents may be the lack of wage growth. Over the five years ending in 2013, personal disposable income rose by just 4.6%, failing to keep track with inflation, as consumer prices rose 7.3% in that time. Three of the 10 metro areas with the highest share of residents with delinquent debt — Lakeland, Jacksonville and Orlando — are located in Florida.

9. West Virginia
> Share with debt in collections: 41.5%
> Avg. debt in collection: $4,697 (16th lowest)
> Median household income: $40,196 (3rd lowest)
> Poverty rate: 17.8% (13th highest)

Like many states with high numbers of financially distressed people, West Virginia’s residents are relatively poor. A typical household earned slightly more than $40,000 in 2012, versus the national median household income of $51,371. Nearly 11% of households earned less than $10,000 that year, second only to Mississippi. West Virginia adults also have relatively low levels of educational attainment. Less than 19% had at least a bachelor’s degree as of 2012, the lowest in the country.

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8. Alabama
> Share with debt in collections: 41.7%
> Avg. debt in collection: $5,604 (17th highest)
> Median household income: $41,574 (4th lowest)
> Poverty rate: 19.0% (7th highest)

Poverty has likely been a factor contributing to so many Alabamians having debt in collections. Low median income may make loan payments harder. Alabama had one of the lowest median household incomes in the country in 2012 at $41,574. Residents in debt used 37% of their gross bi-weekly income for loan payments, one of the higher rates in the country. And while the proportion of households without a bank account fell from 11.9% to 10.2% between 2009 and 2011, the proportion of underbanked households rose from 20.5% to 28.8%. Education may be another factor contributing to Alabama’s high share of residents with delinquent debt. In 2012, 84.0% of the adult population had a high school diploma, more than two percentage points below the nationwide rate.