In early December, the Urban Institute featured an interactive map of the U.S., down to the county level, of the proportion of people with debt in collections. In 2016, fully one American in three owed a debt that was held by a debt collector. The Urban Institute distinguished the median amount in collections from the amount owed just for medical debt. Most debts in collections are unsecured household debts (credit cards, medical debts, student loans), so most of them can be easily discharged in a chapter 7 New York bankruptcy.
Before discussing some of its findings here is some background on how the Urban Institute created the map. The organization obtained a random sample of consumer records from an unnamed credit bureau. It then compared this information from population data from the Census Bureau. Specifically, it focused on the percentage of the populations that were “white” and “non-white”—”African American, Hispanic, Asian or Pacific Islander, American Indian or Alaska Native, another race, or multiracial.” The institute included all charged-off debts, unpaid bills, and credit-card debts that were more than 180 days past due in its definition of “debts in collection.”
Here are some observations, along with some that are relevant to New York bankruptcy debtors.
- About 27 percent of white debtors have debts in collection, in contrast to a surprising 45 percent of non-white debtors.
- The overall median owed is $1,450, and when divided by ethnicity the amount owed is about the same, with white debtors owing about $30 more than non-white debtors at the median.
- 18 percent of all Americans owe medical debts, with only 9 percent not having health insurance. 16 percent of white debtors have medical debts compared to 21 percent of non-white debtors.
- The median medical debt in collections is about $680, but for non-whites that figure rises to $720.
- The proportion of the population with debts in collections at the county level differs drastically by region and state. Large swaths of the southeast and Appalachian states have counties in which more than half of the population has debts in collections.
- In Louisiana, 46 percent of residents owe debts that are in collections; in Texas the figure is only 44 percent. In both states more than half of their non-white populations owe debts in collections.
- The only part of the country where people don’t tend to owe debts in collections is the upper Midwest, particularly Minnesota, where the overall share of the population owing these debts is only 17 percent, but still, 43 percent of its non-white population owe debts in collection. Minnesota just happens to have a small non-white population.
- As for New York: Our state beats the national average too. Only 25 percent of New Yorkers owe debts in collections, 20 percent of the white population, and 34 percent of the non-white population, respectively.
- New Yorkers tend to owe less overall as well: $1,325 statewide (-$125 compared to the national average), but the white population owes only $20 less. The non-white population owes nearly $143 less than non-whites overall.
- New Yorkers also have a low amount of medical debts, about $450, which is about $200 less than the national figure. Non-white New Yorkers owe less than half as much as non-whites overall, $401 to $720.
- People in New York City boroughs tend to do better than the national average as well, except Bronx County, whose white population owes $2,300 at the median in collections. In none of the boroughs does more than 5 percent of the population owe medical debt in collections, which is quite impressive.
The Urban Institute map can be found here.
It’s good to hear that New Yorkers typically don’t owe debts in collections—and very little medical debt for that matter—but if that describes your financial situation, then talking to an experienced New York bankruptcy lawyer can help your strategize your options.
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 Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
