How Pandemic Affected Debt Burdens, State by State and County by County

Even though many collection agencies have reported higher-than-expected payment rates during the 18 months of the COVID-19 pandemic, the number of individuals with a debt in collection largely remained unchanged across the country, according to data released last week. The number of individuals with a debt in collection decreased in 31 states, but the decrease was more than 1% in only four states — Arizona, New Mexico, Rhode Island, and Wisconsin.

Overall, the number of individuals with a debt in collection decreased to 27% of consumers across America in October 2020 from 28% in February 2020.

Interestingly enough the average amount that was in collections was essentially unchanged during that period as well. The average amount of a debt in collections was $1,836 in October 2020, compared with $1,839 in February, a drop that equates to a large cup of coffee, essentially. The largest decreases were in North Dakota ($244) and Wisconsin ($148) while the largest increases were in Oklahoma ($120) and Alaska ($108).

Looking at overall changes in debt during the pandemic, Minnesota came out on top, thanks to a 5% drop in debt collection activity, a 35% drop in student loan delinquency, and a 73% decrease in credit card delinquency. Following Minnesota were Wisconsin, Idaho, Connecticut, and Arizona. Alaska and Texas tied for the worst ranking, largely due to increases in credit card delinquency and increases in the average amount of debt in collections.

The report even looked at debt levels across the 3,000 counties in the United States, identifying 10 where the average amount of debt more than doubled during the first six months of the pandemic.

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