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35% of (American) Adults Have Debt "In Collections"

meeotch (524339) writes | about 3 months ago


meeotch (524339) writes "According to a new study by the Urban Institute, 35% of U.S. adults with a credit history (91% of the adult population of the U.S.) have debt "in collections" — a status generally not acquired until payments are at least 180 days past due. Debt problems seem to be worse in the South, with states hovering in the 40%+ range, while the Northeast has it better, at less than 30%. The study's authors claim their findings actually underrepresent low-income consumers, because "adults without a credit file are more likely to be financially disadvantaged."

Oddly, only 5% of adults have debt 30-180 days past due. This latter fact is partially accounted for by the fact that a broader range of debt can enter "in collections" status than "past due" status (e.g. parking tickets)... But also perhaps demonstrates that as one falls far enough along the debt spiral, escape becomes impossible. Particularly in the case of high-interest debt such as credit cards — the issuers of which cluster in states such as South Dakota, following a 1978 Supreme Court ruling that found that states' usury laws did not apply to banks headquartered in other states.

Even taking into account the folks to lost a parking ticket under their passenger seat, 35% is a pretty shocking number. Anyone have other theories why this number is so much higher than the 5% of people who are just "late"? How about some napkin math on the debt spiral? (And unfortunately, cue the inevitable geek snobbery about how people in debt must be "idiots".)"

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Time, time, time... (1)

niftymitch (1625721) | about 3 months ago | (#47561143)

Time, time, time again this type of information needs
a context of time to tell us anything. Without knowing
what has changed it is difficult to know if this is important
or not.

My guess is that this is astoundingly important not because
of employment or finances but because more and more
government agencies and their contracted proxies are
going after peoples deeper pockets with an escalation of
collection fees and a minimization of notification.

So often we hear that a letter has been posted telling
the delinquent payer to pay up. Yet these are non descript
bulk mailings that have no postmark and look like so
much junk mail.

I happen to have a notice for a dog license renewal by an
address in Texas some two time zones away from me.
Now how is it that my local municipality feels free to contract
a collection to a service in another state in a way that gives
that LLC the power to add a tax levy on my home in the form
of a property lean and not tell me.

If these tiny fees that I see from a five dollar bridge toll
to a dog or cat license issued and sent to collection by some
Kafka inspired process that .....

Well if this is what is going on we have trouble right here in river city
my friend.


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