Study: 35 percent in US facing debt collectors

[kent]

35%? WTH? 

money.msn.com/business-news/article.aspx?feed=AP&date=20140729&id=17812199

WASHINGTON (AP) - More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday by the Urban Institute.

These consumers fall behind on credit cards or hospital bills. Their mortgages, auto loans or student debt pile up, unpaid. Even past-due gym membership fees or cellphone contracts can end up with a collection agency, potentially hurting credit scores and job prospects, said Caroline Ratcliffe, a senior fellow at the Washington-based think tank.

"Roughly, every third person you pass on the street is going to have debt in collections," Ratcliffe said. "It can tip employers' hiring decisions, or whether or not you get that apartment."

The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The study points to a disturbing trend: The share of Americans in collections has remained relatively constant, even as the country as a whole has whittled down the size of its credit card debt since the official end of the Great Recession in the middle of 2009.

As a share of people's income, credit card debt has reached its lowest level in more than a decade, according to the American Bankers Association. People increasingly pay off balances each month. Just 2.44 percent of card accounts are overdue by 30 days or more, versus the 15-year average of 3.82 percent.

Yet roughly the same percentage of people are still getting reported for unpaid bills, according to the Urban Institute.......

[djAdvocate]

this is what happens when incomes stagnate after rising for 140 years.  this is the "end game".

first, we worked longer hours.
next, we sent the wife to work.
finally, we went into debt.

after all, why give out the money in wages, when they can lend it out and earn interest on it?

[jkapp]

Jul 29, 2014 11:20:10 GMT -5 djAdvocate said:

this is what happens when incomes stagnate after rising for 140 years.  this is the "end game".

first, we worked longer hours.
next, we sent the wife to work.
finally, we went into debt.

after all, why give out the money in wages, when they can lend it out and earn interest on it?

Except when dealing with people in debt it usually ends up they are in debt for stuff they wanted (not needed), not from running up credit for the basics.

And the wife went to work before wages stagnated...in fact, it was one reason it helped stagnate wages - the labor pool grew immensely in a very short span of time.  More labor, more competition for each job, more likely people will take less money for said job.  This was okay because now there were two incomes, but with the extra money came extra spending, the spending became more extravagant over time, and after a few generations the cash spending turned into credit spending because people didn't know that previous generations sacrificed FIRST before being able to buy whatever they wanted. Yeah the previous generations had a house and two cars, a couple of TVs and modern appliances, but that was when they were in their 40's - not their 20's.

Then factor in automation/innovation which made many jobs obsolete, thus shrinking the demand pool in some industries and raising the labor pool again for the rest.

Then factor in millions of illegal immigrants undercutting the pay for people working the migrant jobs, throwing those people back into non-migrant workforce, further increasing the labor pool. Now those illegal imigrants are doing the same with fast food jobs.

The jobs that were shipped overseas for NAFTA/etc are a drop in the bucket compared to the previous issues.  Plus, we still have a ton of manufacturing in this country, just not so much for cheap shit.  It is not economically feasible to manufacture cheap shit in the U.S., yet there is a strong market for cheap shit in the U.S. (not everyone wants to spend $40 for a t-shirt).  Thus, some manufacturing is done elsewhere. The last place I worked dealth with over six thousand suppliers, 97% of which had their operations in the U.S. (some big, some small). That's quite a bit of manufacturing that's still done within our borders...

[djAdvocate]

Jul 29, 2014 13:22:28 GMT -5 jkapp said:

Jul 29, 2014 11:20:10 GMT -5 djAdvocate said:

this is what happens when incomes stagnate after rising for 140 years.  this is the "end game".

first, we worked longer hours.
next, we sent the wife to work.
finally, we went into debt.

after all, why give out the money in wages, when they can lend it out and earn interest on it?

Except when dealing with people in debt it usually ends up they are in debt for stuff they wanted (not needed), not from running up credit for the basics..

sorry, but i can't entertain a discussion about what one person considers a luxury, and the other a necessity.  you'll have to draw someone else into that pit. 

it skirts my point, anyway.  if wages had kept up with productivity over the past half century, all of that "useless" stuff would be affordable to a thriving middle class.  THAT is the problem.

[djAdvocate]

Jul 29, 2014 13:22:28 GMT -5 jkapp said:

The jobs that were shipped overseas for NAFTA/etc are a drop in the bucket compared to the previous issues.  Plus, we still have a ton of manufacturing in this country, just not so much for cheap shit.  It is not economically feasible to manufacture cheap shit in the U.S., yet there is a strong market for cheap shit in the U.S. (not everyone wants to spend $40 for a t-shirt).  Thus, some manufacturing is done elsewhere. The last place I worked dealth with over six thousand suppliers, 97% of which had their operations in the U.S. (some big, some small). That's quite a bit of manufacturing that's still done within our borders...

dem was right when he said that we are still the world's #1 manufacturer.  that is quite true.

[The Walk of the Penguin Mich]

This data is so skewed that I really doubt it is accurate.  The study lumped all collections together, so even cases where one is disputing things, or waiting for insurance to pay, that you can get sent there. 

It looked like they assumed that bills were sent to collections if they were 180 days late.  However, I know that I have had medical bills sent to collection in less than 60 days, while waiting or insurance companies to pay out.

If you look at the map, a large portion of the delinquencies are in areas where elderly retire.  I'd bet my degree that the study did not control for this.  Retirement community = more medical services = lousy billing.

The study was shoddily done, and the stats not well done either.

[djAdvocate]

Jul 29, 2014 20:54:44 GMT -5 The Walk of the Penguin Mich said:

This data is so skewed that I really doubt it is accurate.  The study lumped all collections together, so even cases where one is disputing things, or waiting for insurance to pay, that you can get sent there. 

It looked like they assumed that bills were sent to collections if they were 180 days late.  However, I know that I have had medical bills sent to collection in less than 60 days, while waiting or insurance companies to pay out.

If you look at the map, a large portion of the delinquencies are in areas where elderly retire.  I'd bet my degree that the study did not control for this.  Retirement community = more medical services = lousy billing.

The study was shoddily done, and the stats not well done either.

thanks for questioning the OP, Mich.  i find i have less and less time for such things these days.