Urban Institute Studies: Debt in America and Delinquent Debt in America

Debt in America Abstract: Debt can be constructive, allowing people to build equity in homes or finance education, but it can also burden families into the future. Total debt is driven by mortgage debt; both are highly concentrated in high-cost housing markets, mostly along the coasts. Among Americans with a credit file, average total debt was $53,850 in 2013, but was substantially higher for people with a mortgage ($209,768) than people without a mortgage ($11,592). Non-mortgage debt, in contrast, is more spatially dispersed. It ranges from a high of $14,532 in the East South Central division to a low of $17,883 in New England. Delinquent Debt in America Abstract: Roughly 77 million Americans, or 35 percent of adults with a credit file, have a report of debt in collections. These adults owe an average of $5,178 (median $1,349). Debt in collections involves a non-mortgage bill—such as a credit card balance, medical or utility bill—that is more than 180 days past due and has been placed in collections. 5.3 percent of people with a credit file have a report of past due debt, indicating they are between 30 and 180 days late on a non-mortgage payment. Both debt in collections and debt past due are concentrated in the South. Commentary: The study on Delinquent Debt in America, finding that on-third of Americans have a debt in collections, has garnered more attention in the media, but is actually more interesting if read in conjunction with its companion study, Debt in America, released at the same time.  Focusing on the non-mortgage debt, as that is what is more susceptible to reduction in bankruptcy, albeit not completely, due to non-dischargeable debts like student loans and taxes (the later is not included in this amount), the following comparison arises by combining data sets:

Debt, Delinquent Debt, Income and Ratios by Census Division (2013 dollars)
Census Division	Total Average Non-mortgage Debt	Average Non-mortgage Debt in Collections	Ratio of Average Non-Mortgage Debt in Collections to Total Average Non-Mortgage Debt	Average Household Income	Ratio of Average Non-mortgage Debt to Average Household Income	Ratio of Average Non-Mortgage Debt in Collections to Average Household Income
Northeast
New England	$17,883.00	$4,801.00	26.85%	$86,283.00	20.73%	5.56%
Middle Atlantic	$17,189.00	$4,895.00	28.48%	$80,582.00	21.33%	6.07%
Midwest
East North Central	$15,532.00	$4,727.00	30.43%	$65,877.00	23.58%	7.18%
West North Central	$16,043.00	$5,492.00	34.23%	$67,020.00	23.94%	8.19%
South
South Atlantic	$16,138.00	$5,258.00	32.58%	$71,633.00	22.53%	7.34%
East South Central	$14,532.00	$4,748.00	32.67%	$57,511.00	25.27%	8.26%
West South Central	$15,260.00	$4,896.00	32.08%	$65,843.00	23.18%	7.44%
West
Mountain	$16,177.00	$6,171.00	38.15%	$70,512.00	22.94%	8.75%
Pacific	$15,259.00	$5,517.00	36.16%	$82,134.00	18.58%	6.72%
United States	$15,898.00	$5,178.00	32.57%	$72,254.00	22.00%	7.17%

This shows that the Midwest and South have the highest levels of non-mortgage debt in collections as a percentage of household income, particularly compared to the New England and Pacific Census Divisions. Then compare against bankruptcy filings (which required reconfiguration of statistics from the Administrative Office of the Court, since it tracks by State and Federal Circuit, but not Census Division):

Bankruptcies by Census Division
Census Division	Non-Business Bankruptcies				Total Population (7/2013 est.)	Bankruptcies per 1,000
	Ch.  7	Ch.  11	Ch.  13	Total
Northeast
New England	23,185	44	4,313	27,542	14,618,806	1.88
Middle Atlantic	67,496	112	23,671	91,279	41,324,267	2.21
Midwest
East North Central	154,103	83	54,800	208,986	46,662,180	4.48
West North Central	43,942	18	14,423	58,383	20,885,710	2.80
South
South Atlantic	126,703	282	83,766	210,751	61,783,647	3.41
East South Central	47,234	62	51,732	99,028	18,716,202	5.29
West South Central	35,571	55	40,168	75,794	37,883,604	2.00
West
Mountain	69,641	193	14,739	84,573	20,795,958	4.07
Pacific	134,588	428	36,623	171,639	51,373,178	3.34
United States (Excl. territories, Incl. DC)	702,463	1,277	324,235	1,027,975	314,043,552	3.27

The ranking of Census Bureau Divisions by ratio of non-mortgage debt to household income is:

Census Bureau Division	Ratio of Average Non-Mortgage Debt in Collections to Average Household Income
Mountain (AZ, CO, ID, MT, NM, UT)	8.75%
East South Central (AL, KY, MS, TN)	8.26%
West North Central (IA, KS, MN, MO, ND, NE, SD)	8.19%
West South Central (AR, LA, OK, TX)	7.44%
South Atlantic (DC, DE, FL, GA, MD, NC, SC, VA WV)	7.34%
East North Central (IL, IN, MI, OH, WI)	7.18%
Pacific (AK, CA, HI, OR, WA)	6.72%
Middle Atlantic (NJ, NY, PA)	6.07%
New England (CT, MA, ME, NH, RI, VT)	5.56%

And  the ranking of Census Bureau Divisions by bankruptcies per 1,000  is:

Census Bureau Division	Bankruptcies per 1,000
East South Central (AL, KY, MS, TN)	5.29
East North Central (IL, IN, MI, OH, WI)	4.48
Mountain (AZ, CO, ID, MT, NM, UT)	4.07
South Atlantic (DC, DE, FL, GA, MD, NC, SC, VA WV)	3.41
Pacific (AK, CA, HI, OR, WA)	3.34
West North Central (IA, KS, MN, MO, ND, NE, SD)	2.80
Middle Atlantic (NJ, NY, PA)	2.21
West South Central (AR, LA, OK, TX)	2.00
New England (CT, MA, ME, NH, RI, VT)	1.88

So while New England has both the lowest ratio of debt in collection to household income and bankruptcies per 1,000 and the East South Central has the highest in both, there are differences.  For example, the West South Central division has the third highest ratio of debt in collection, but the second lowest bankruptcy rate.  Perhaps, as other studies have shown, the generous exemptions, particularly the unlimited homestead exemption in Texas, which dominate the division, account for the comparatively low bankruptcy filings. For a copies of the studies, please see: Debt in America Delinquent Debt in America