Non-mortgage debt (like credit cards, auto loans, student loans, and other types) commonly leads to New York bankruptcy filings. As a result, it’s important to track information about Americans’ debt levels. In late July, the Urban Institute did just that by publishing a study that revealed some disturbing facts about Americans’ non-mortgage debt. A whopping 77 million Americans (people, not households or families) have a debt that’s in collections. On the bright side—sort of—New York (and the northeast region generally) ranks fairly low among states by the percentage of debtors with debts in collections: only 28.3 percent, making it 37th. Nationally, 35.1 percent of debtors have debts in collections
The study took a very large sample of data from the credit reporting bureau TransUnion, and its estimates surprisingly understate the problems Americans have paying down their debts because about 22 million Americans have no credit files. Here are some other findings:
- The average New Yorker’s debt in collections was $5,147, placing it 24th among other states (and the District of Columbia, which the Urban Institute included as a state in its study). Nationally, the average was $5,178, so New York is just about the same as the national average.
- The study also looked into debtors with debts that were past due, which means debts that haven’t been paid within 180 days. Only 5.3 percent of Americans owed a debt that was past due, but New Yorkers came in lower with only 4.7 percent past due (30th).
- The study lists the mean household income for each state. It’s a tad misleading because it’s household rather than personal income, and it’s not just the incomes of people who owe non-mortgage debts. Nonetheless, one reason New York does better than the national average and most other states in terms of debts that are past due or in collections is that New Yorkers have higher earnings. This is also true for the Northeast in general. For instance, New Jersey ranked 49th for owing past due debts and average household income.
- One thing the study does that others don’t is analyze its data by metropolitan statistical area (MSA), which are U.S. cities and their surrounding counties. New York City does better than the state. 4.2 percent owe debts that are past due, 27.9 percent in collections, and the average non-mortgage debt they owe in collections is $4,854.
The entire study is fairly short and can be found here.
Although New York (and New York City) compares well to other states and the country as a whole, the statistics the study gives still seem pretty high. Moreover, states and MSAs don’t always compare well given that New York is the third most populous state in the country and New York City is the largest MSA. This means that there are probably more people in the state and city who owe past due debts or debts in collections than people who live elsewhere. It’s even possible that more New Yorkers have serious debt problems than people in smaller states and cities.
Consequently, if you’ve fallen behind on your debts and they’re in collections, you’re circumstances are probably not as unusual as the Urban Institute’s report might leave you to believe. It’s imperative to discuss your situation with an experienced New York bankruptcy lawyer to discharge those debts and get a fresh start.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced fair debt collection practices act Bruce Weiner for a free initial consultation.