Study shows 1/3 of Americans have debt in collections

By Balitang America Staff, ABS-CBN North America Bureau

July 29, 2014

REDWOOD CITY, Calif. – A new study on consumer debt might make you more cautious about managing your credit.

The Urban Institute found that slightly more than 77 million American consumers – around 35 percent – are targeted by debt collectors for unpaid bills.

Ten percent of them are in collections for debts that aren’t very large – less than $125 for things like gym memberships or utility bills.

The study also showed that nearly 12 million adults have non-mortgage debt reported past due, and they need to pay about $2,200 on average to become current on that debt.

Experts say having debts in collections brings down credit scores, which can make job and apartment hunting tougher.

Rod Mercado, president and CEO of debt settlement company Financial Rescue LLC, said he isn’t surprised that such a high number of American consumers have debt in collections.

“Here in America, everything revolves around credit,” Mercado said. “So when the economy is bad, it means people will have problems finding jobs. What goes with that? Problems with debts.”

Mercado added: “The best thing to do is to communicate with the collector, whether you can pay pack the debt or not. Where there is communication, it delays the collection process. The majority of people who get sued right away by collectors are the ones who avoid collection calls. The best thing to do is talk to the collection agency, tell them your status. Or if you can do a settlement, then do it.”

“Here in America, everything revolves around credit,” Mercado said. “So when the economy is bad, it means people will have problems finding jobs. What goes with that? Problems with debts.”

Mercado added: “The best thing to do is to communicate with the collector, whether you can pay pack the debt or not. Where there is communication, it delays the collection process.”

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  • Filam
    29 July 2014 at 8:21 pm - Reply

    And you are pushing amnesty
    When. 92.5 million Americans are out
    Of the labor force
    Most of the illegals will get welfare

    More poverty for Americans
    Is that what you want?

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