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1 in 3 Americans Have a Debt in Collections: Study

Urban institute reveals collections debt is 'pervasive and threads through nearly all communities.'

(Image:  Images Money / Flickr Creative Commons)

(Image:  Images Money / Flickr Creative Commons)

At least 35 percent of U.S. adults have a debt in collections, according to a study (pdf) released Tuesday by the Urban Institute in conjunction with Encore Capital Group's Consumer Credit Research Institute.

This amounts to 77 million people with credit histories, according to a random sampling of 7 million credit files from 2013.

The study measured collections for non-mortgage bills that are allegedly past due, which can include medical costs, electricity and water payments, and even parking tickets. Those taken to collections owed an average of $5,200, the study finds.

Caroline Ratcliffe, a senior fellow at the Urban Institute, said in a press statement that collections debt "is pervasive and threads through nearly all communities." She added, "Delinquent debt can harm credit scores, which can tip employers' hiring decisions, restrict access to mortgages, and even increase insurance costs."

Nevada topped the charts, with 47 percent of its population taken to collections. Collections debts were heavily concentrated in the South, as well as Washington, DC.

The findings do not represent the approximately 22 million adults with no formal credit histories, who are disproportionately low-income.

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