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

debt settlement

It 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

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 make up 10.1%.  Other collections are monies owed to the government, retailers, telecoms and utilities.

Even though I live in a world of bankruptcy it is still incredible to think 35 percent of every American adult have a report of debt in collections. There is a disconnect about the proper use of credit and 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.  Now don’t get me wrong – I completely understand those who are struggling to feed their family and keep a dependable vehicle that get them to work.

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  • “Suggestions on How to Hire an Attorney”
  • “Why Do I Offer Free Legal Advice?”