Fairway Capital Recovery Blog

Study Shows 35 Percent of American Adults are in Debt Collections

Posted by Kelly Kramer on Tue, Oct 28, 2014

A staggering number was recently released by the think tank Urban Institute and debt buyer Encore Capital Group.  More than 1/3 of all Americans with a credit report are currently in a stage of debt collection. 

InsideArm.com writer Patrick Lunsford shared information that was collected from TransUnion consumer credit reports as part of the “Delinquent Debt in America” study. 

“The result was that 35.1 percent of the credit reports examined showed collection accounts or those qualified for collections. Those results closely mirror a Federal Reserve study from 2004 which showed 36.5 percent of credit reports with an account in collections.account overdue

The authors noted that even the 35.1 percent figure is a bit too low; some 22 million low-income adults do not have credit files and were represented at all in the study. Researchers used a random sample of 7 million TransUnion reports at a fixed point in time. The sample was out of a total population of 220 million Americans with credit files.

Among people with a report of debt in collections, the average amount owed was $5,178, with a median of $1,349.”

 

These numbers show the great need for reputable accounts receivable management companies.  At Fairway Capital Recovery, in addition to providing traditional collections services, we also have the ability to assist client in setting up their accounts receivable process to reduce the number of accounts that end up in collections.    

Topics: accounts receivable management, medical collections