It is incredible to think that one in three of all Americans is faced with debt collection.

The other day, a caller said, “I used a document preparer or bankruptcy petition preparer. Certainly they have obligations to keep my social security number confidential.” Unfortunately, I had to say, “Oh, how wrong you are.”

statute of LimitationsIt is incredible to think that one in three of all Americans are faced with debt that is currently in collection.  According to a study by the Urban Institute:

“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 collection 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.”

37.9% of the debts collected are health-related debts

Think about the information you are giving this stranger: all your financial information, your children’s names, bank accounts, and your social security number. You do this without the slightest guarantee that the information will be kept safe.

According to the study, 35.1% of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The Association of Credit and Collection Professionals reports that healthcare-related bills account for 37.9% of the debts collected.  Student loan debt represents another 25.2%, and credit card debt makes up 10.1%.  Other collections are monies owed to the government, retailers, telecoms, and utilities.

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MUSINGS FROM DIANE:

Even though I spend most of my day in the world of bankruptcy, it is still incredible to think that 35 percent of every American adult has a debt in collections. There is a disconnect between the proper use of credit and the societal expectation that we must have the latest cell phone, designer jeans, or the largest house.  Somewhere, we lost how to live within our means.

Don’t get me wrong, I completely understand those who are struggling to feed their family and keep a dependable vehicle so they can get to work.  I know that most of my clients faced situations that were not in their control—loss of a job, medical problems, or divorce.  Bankruptcy is intended to help these folks get a fresh start in life.  I am very proud of my clients because they worked very hard but had to file for bankruptcy because there was no other choice.

We have several videos on this site.  The following are two:

 

452 words|2.3 min read|Categories: Bankruptcy Articles & Resources, Collection companies & Debt buyers, Consumer Issues, Debt Relief Agencies, General Videos, Payday and other usury loans|By |Published On: August 17th, 2014|Last Updated: December 25th, 2023|

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Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

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