1/3 of Americans Delinquent on Debt...

[fitzgeralday]

....according to a recent tweet by USA Today.  The breakdown by state is interesting, wondering what the folks in Mississippi are doing that others are not.  And what in the ham sandwich is going on in Hawaii?  Inquiring minds would like to know.



How does your state measure up?  My new stomping grounds (WI) are a vast improvement from whence I came (VA & DC).  I think materialism has a lot to do with that difference, I have not witnessed as much of a tendency towards 'Keeping up with the Jones' in Madison compared to the DMV.

[hybrid]

The study being cited (also reported on CNN Money) is here.

http://www.urban.org/publications/413191.html

It's a very interesting read.

[Jags4186]

My guess is Mississippi is the poorest state so there's just less opportunity to borrow money.  Hawaii has the highest cost of living so thats why it has the highest debt.

[fitzgeralday]

The study being cited (also reported on CNN Money) is here.

http://www.urban.org/publications/413191.html

It's a very interesting read.

Thanks for sharing!

[thd7t]

When you read this, you should note that this includes mortgage debt, which makes the amounts owed a lot less shocking.  It also means that the cost of homes is reflected more than the opportunity to borrow money

[fitzgeralday]

My guess is Mississippi is the poorest state so there's just less opportunity to borrow money.  Hawaii has the highest cost of living so thats why it has the highest debt.

This makes sense re Hawaii and Mississippi, especially considering that other "poor" states also seem to have lower debt amounts.  I am slightly surprised that MD and VA seem to have more debt when compared to other high cost of living states.

[fitzgeralday]

When you read this, you should note that this includes mortgage debt, which makes the amounts owed a lot less shocking.  It also means that the cost of homes is reflected more than the opportunity to borrow money

Good point!

[NoraLenderbee]

When you read this, you should note that this includes mortgage debt, which makes the amounts owed a lot less shocking.  It also means that the cost of homes is reflected more than the opportunity to borrow money

Are you sure? It seems to me that the study excludes mortgage debt, although HELOCs are included.

Definitions
• Debt past due is the total amount of non-mortgage debt that must be paid for the accountholder to be current on all non-mortgage trades. Non-mortgage trades include the total balance of open trades, excluding mortgages, as well as trade lines that have been closed but not charged off into collections. Non-mortgage trades can include credit cards, student loans, automobile loans, other installment loans, home equity lines of credit, and some utility bills.
• Debt in collections includes trade lines (e.g., credit cards) that were previously past due and have been closed and charged off. Debt in collections can also originate from unpaid bills (e.g., medical bill, utility bill, parking ticket, child support, membership fees) that are reported to the credit bureau. Debts in collection include these various forms of non-mortgage debt. While mortgage debt could result in collections activity, it is very rare.

[soccerluvof4]

If its Delinquent in Debt its even worse. Any debt is bad but alot of people need to take a Mortgage. But if thats the ave DELINQUENT like the op wrote its nuts...

[bacchi]

The delinquent, non-mortgage, debt is another graphic.

http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN

The graphic above includes mortgage debt.

[viper155]

We are a nation of idiots. We get what we deserve. And it all starts at the voting booth.

[Goldielocks]

The delinquent, non-mortgage, debt is another graphic.

http://money.cnn.com/2014/07/29/pf/debt-collections/index.html?iid=HP_LN

The graphic above includes mortgage debt.

Hmm,  does it seem to suggest that the lower rate of health insurance coverage (Texas) equates to more likely to have debt in collections?   Nevada of course may be due to the housing rise / fall, but what about the others?

[mikefixac]

I wonder then: Are 1/3 debt collectors delinquent?

[wtjbatman]

Thanks Obama

[DollarBill]

Wonder if they include taxes? It still kills me that we have to continue to pay taxes on a paid for house. I pay $4K a year in taxes just to live in a house I own...doesn't seem right!

[Bateaux]

I wonder what percentage of Americans are debt free like everyone here strives to be.  I was debt free at 30 in the sense that my assets were greater than my debt.  Now I'm totally debt free.   I owe nothing and save a large amount of money.  How many of us are out there?

[dragoncar]

Wonder if they include taxes? It still kills me that we have to continue to pay taxes on a paid for house. I pay $4K a year in taxes just to live in a house I own...doesn't seem right!

I wonder if there's a good insurance product for people like you.  You give me 200k, and I'll promise to pay all your property taxes for eternity.  Consider it part of the cost of "owning" your house

[ellsa]

Wonder if they include taxes? It still kills me that we have to continue to pay taxes on a paid for house. I pay $4K a year in taxes just to live in a house I own...doesn't seem right!

I wonder if your "paid for house" sits in a municipality that requires police, fire, roads, schools.............hmmm

[slugline]

Wonder if they include taxes? It still kills me that we have to continue to pay taxes on a paid for house. I pay $4K a year in taxes just to live in a house I own...doesn't seem right!

The alternative would be a world where local services are funded by taxing only renters?

[prof61820]

We are a nation of idiots. We get what we deserve. And it all starts at the voting booth.

We are nation that does not value or want compromise from our elected officials.  We have a system of government that works best (or at all) when politicians compromise.

[tooqk4u22]

It looks like more of a headline whiny type of research article. 

Couple things to keep in mind:
-per report it includes anything reported as a collection whether or not its been settled, paid, discharged which can stay on your report for 7 years and doesn't discriminate by amount. I have near perfect credit and pay stuff on time but there have been instances where a doctors invoice or some other innocuos bill has gone unoticed that has shown up on my report.  For discussion purposes lets assume that accounts that go into debt collection are fairly consistent by year - that would mean that 1/7th of the of accounts in collection are current/recent issues meaning that while 35% of the credit population has a debt collection on its record only 5% occured recently (IMO this would be far more informative to understand the trends)

- what about fraud items, someone opens an account under your name fraudently and is caught until that moment when you try to get a loan or then the credit reports shows that account past due and in collections - that will take two years to get off your record.

- affiliations/errrors, people incorrectly assume that credit reports are based on your social sec number, that is only part of the case, it is based more on name and address commonalities.  I have had debts of other people show up on my credit report many times.

[frugalnacho]

Thanks Obama

[Jack]

Wonder if they include taxes? It still kills me that we have to continue to pay taxes on a paid for house. I pay $4K a year in taxes just to live in a house I own...doesn't seem right!

The alternative would be a world where local services are funded by taxing only renters?

Personally, I wish it were possible to gain allodial title to property by paying, as a lump sum, the present value of all future taxes (at the current tax rate, or even at some slightly-higher-than-current tax rate the municipality declared for this purpose).

After FI, I'd like to set up some kind of trust to manage a perpetuity to pay the taxes on all property I (and eventually, my descendents) own.

[tooqk4u22]

Wonder if they include taxes? It still kills me that we have to continue to pay taxes on a paid for house. I pay $4K a year in taxes just to live in a house I own...doesn't seem right!

The alternative would be a world where local services are funded by taxing only renters?

Personally, I wish it were possible to gain allodial title to property by paying, as a lump sum, the present value of all future taxes (at the current tax rate, or even at some slightly-higher-than-current tax rate the municipality declared for this purpose).

After FI, I'd like to set up some kind of trust to manage a perpetuity to pay the taxes on all property I (and eventually, my descendents) own.

I would be all for that - assuming a 3% rate of inflation of future property taxes (although the last decade was more like 6%) and an 8% expected rate of return (common number applied to state pension funds) it would equate to 20x the current year taxes for a 99 year "buyout".   On top of fixing a meaningful cost it would also force local governing bodies to be more prudent in their budgeting/spending.

[prof61820]

Thanks Obama

Hilarious!

[Jack]

Personally, I wish it were possible to gain allodial title to property by paying, as a lump sum, the present value of all future taxes (at the current tax rate, or even at some slightly-higher-than-current tax rate the municipality declared for this purpose).

After FI, I'd like to set up some kind of trust to manage a perpetuity to pay the taxes on all property I (and eventually, my descendents) own.

I would be all for that - assuming a 3% rate of inflation of future property taxes (although the last decade was more like 6%) and an 8% expected rate of return (common number applied to state pension funds) it would equate to 20x the current year taxes for a 99 year "buyout".   On top of fixing a meaningful cost it would also force local governing bodies to be more prudent in their budgeting/spending.

Well, ideally I'd prefer "heat death of the Universe" instead of "99 years," but I'll concede the latter has a better chance of getting the government to actually agree to it.

[MoneyCat]

Personally, I wish it were possible to gain allodial title to property by paying, as a lump sum, the present value of all future taxes (at the current tax rate, or even at some slightly-higher-than-current tax rate the municipality declared for this purpose).

After FI, I'd like to set up some kind of trust to manage a perpetuity to pay the taxes on all property I (and eventually, my descendents) own.

I would be all for that - assuming a 3% rate of inflation of future property taxes (although the last decade was more like 6%) and an 8% expected rate of return (common number applied to state pension funds) it would equate to 20x the current year taxes for a 99 year "buyout".   On top of fixing a meaningful cost it would also force local governing bodies to be more prudent in their budgeting/spending.

Well, ideally I'd prefer "heat death of the Universe" instead of "99 years," but I'll concede the latter has a better chance of getting the government to actually agree to it.

Just start your own corporation and then you'll never have to pay taxes on anything ever again.