Report: 35 Percent of Americans Have Debt in Collections

• July 29, 2014

by Lark Turner

More than a third of Americans with a credit report have debts in collections, according to a study released by the Urban Institute on Tuesday. That amounts to about 77 million people.

That’s a lot, according to the Institute’s Caroline Ratcliffe, who spoke with The Washington Post.

“It’s a stunning number, and it threads through nearly all communities,” she said.

The portion of the report that the number came from looked at non-mortgage debt, which measures Americans’ financial stability and the health of consumer credit.

Overall, mortgage debt is the biggest driver when it comes to total individual debt. The report notes that the average amount of debt in the U.S. was $53,850 in 2013, but that number was much higher for people with a mortgage ($209,768) than for those without a mortgage ($11,592). That makes sense, given the ubiquity of taking out a mortgage to pay for a home in the U.S. As the report notes:

“Mortgage debt drives total debt, with the correlation between local area average total debt and average mortgage debt standing at 0.96. This is consistent with the fact that a home is generally people’s largest purchase and that roughly two-thirds of homeowners have a mortgage.”

In the DC area, the average debt sans-mortgages was $18,700. The average mortgage debt was $76,860. And the total average debt amounted to $95,560.

But in DC proper, the average debt was significantly lower than in the statistical area, which encompasses a large swath of the region. DC residents had an average total debt of $65,532, with $49,635 of mortgage debt and $15,896 of non-mortgage debt. That lower debt compared to the statistical area is likely related to the District’s high median income of $103,652.

This article originally published at https://dc.urbanturf.com/articles/blog/35_percent_of_americans_have_debt_in_collections_urban_institute_says/8795