After spending money they didn’t have, Americans are now left to face tremendous levels of debt. Overall, the country is stuck with a $12 trillion unpaid bill, and the national average household debt is $53,850. This level of debt leads to unwanted telephone calls and letters in the mail by collection agencies.
According to a new study by the Urban Institute, a Washington-based think tank, one in three, or 77 million, Americans with a credit report have “debt in collections.” The debt collections, which vary from credit card bills to parking tickets, ranged from $25 to as high as $125,000 – the average amount was $5,200.
Study authors argue that when unpaid debt is sent into collections then this can hurt the person’s credit scores and even their job prospects because a growing number of employers are checking into the job applicants’ credit histories
Considering that every region of the U.S. is affected by debt collectors, no one is immune from receiving calls during dinner or piles of letters sent each day. Although debt is causing problems in every area of the country, the highest concentrations can be found in the south and west, particularly in Texas, where several cities are facing enormous levels of debt and notifications from collection departments.
The Federal Reserve Bank of Philadelphia notes that the U.S. collections industry recuperates approximately $50 billion each year and maintains a workforce of roughly 140,000 workers.
Josh Bivens, research and policy director at the Economic Policy Institute, told the USA Today that this is just another example showing how Americans are still suffering from the effects of the economic collapse and that they’re still not recovering or “climbing all the way out of” the Great Recession.
Here are some interesting facts about average debt levels in U.S. households:
– Average credit card debt: $15,191
– Average mortgage debt: $154,365
– Average student loan debt: $33,607
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