From medical bills to gym membership fees, increasing
numbers of us can't meet our debts.
July 31, 2014
It's official: America is being crushed under a
mountain of debt.
A
new study by the Urban Institute says that over 35
percent of Americans have debts and unpaid bills that
have been reported to collection agencies. This means
the bill is so overdue (generally at least 180 days)
that the account has been closed and placed in
collections.
That comes to 77 million souls who face the sleepless
nights and anxiety that comes from an inability to meet
debt obligations. These citizens owe an average of
$5,178 each (median $1,349).
It's happening to us in all walks of life.
For some, it's an unpaid credit card bill. For
others, it's a medical bill they couldn't pay on time.
Students are behind on their debt payments. Homeowners
can't pay their mortgages. From past-due gym membership
fees to delinquent utility bills to unpaid parking
tickets, Americans owe more than they can pay, and face
damaged credit scores and job prospects once collection
agencies get their hooks into them. This creates a
vicious cycle in which people become less able to pay
debts, which then continues to mount.
Urban Institute senior fellow Caroline Ratcliffe put
it this way: "Roughly, every third person you pass on
the street is going to have debt in collections. It can
tip employers' hiring decisions, or whether or not you
get that apartment."
Certain parts of the country are debt hotspots:
Nearly half of the people living in Las Vegas, where the
housing crisis hit hard, have debt in collections. Big
chunks of the South are battlling debt, notably the
cities of Orlando, Jacksonville, Memphis, Columbia,
South Carolina, and Jackson, Mississippi. On the other
hand, Salt Lake City, San Jose, and Seattle have the
least amount of debt.
Many people dealing with debt collectors report
bullying and harassment. But financial distress is a
worry not just for the individual, but for famlies and
communities, too. With increasing numbers of Americans
living paycheck to paycheck, any emergency, big or
small, can push them into financial hell. Psychologists
and sociologists are beginning to explore the
debt-stress connection and how it destroys social bonds.
In Shakespeare's
The Merchant of Venice, the heroine pleads for
debt relief by appealing to Christian mercy. In
contemporary America, no such mercy exists. Debtor's
prisons
appear to be on on their way back.
Lynn Parramore is an AlterNet senior editor.
She is cofounder of Recessionwire, founding
editor of New Deal 2.0, and author of "Reading
the Sphinx: Ancient Egypt in Nineteenth-Century
Literary Culture." She received her Ph.D. in
English and cultural theory from NYU. She is the
director of AlterNet's New Economic Dialogue
Project. Follow her on Twitter @LynnParramore.
http://www.alternet.org/economy/debtor-nation-35-percent-americans-owe-bills-collection-agencies?