Medical debt is a growing problem nationwide. According to data published by credit reporting agency Experian, unpaid medical bills were in excess of $127 billion last year. People in Texas with outstanding medical debts might receive collections calls or demand letters. They might even end up in court due to these debts. Almost 20 percent of Americans have had their credit scores negatively impacted because of unpaid medical debt.
Of all American cities, San Antonio is where millennials have the highest median debt. Those between the ages of 22 and 37 who live in San Antonio have a median balance of $27,122, according to LendingTree. While student loan balances make up the majority of that debt nationally, auto loans are the largest source of debt in San Antonio. On average, car loans make up 43 percent of what is owed to creditors.
In a recent study, more than 2 percent of credit reports had a medical debt of less than $200 sent to a collection agency. The study, which was published in the journal Health Affairs, looked at 4 million credit reports from 2016 to come to that conclusion. While these medical debts may seem small, they can turn into major issues for Texas residents who have them sent to collection.
A study released recently by the investment bank Charles Schwab suggests that many young people in Texas and around the country get into problems with debt even before they are old enough to legally purchase alcohol. The researchers also found that many millennials and members of Generation Z see student loans and mortgages as bad debt while viewing credit card balances as good debt. Financial experts generally believe the opposite.
In October 2009, the unemployment rate throughout the country was 10 percent. Roughly 10 percent of credit card accounts went into bad status. Between 2008 and 2013, Texans and other Americans had begun to make paying down debt a priority as a result of the recession. However, by the first quarter of 2018, household debt in the United States was at $13.2 trillion, which was the highest total ever recorded.
Some Texas consumers may be paying a significant amount of money in credit card fees and interest. The personal finance website MagnifyMoney looked at data provided by the Federal Deposit Insurance Corporation and found that Americans had paid over $104 billion in interest and fees over the past year. That number is anticipated to increase.
As many people in Texas know, it is sometimes necessary to file bankruptcy. Things happen that cause financial hardship, and debtors need relief. Chapter 13 bankruptcies can span three years or five years, sometimes creating a challenge for debtors who find themselves needing to purchase an automobile during this time.
Texas residents considering filing for bankruptcy to handle their substantial debts should be aware that not every type of debt is eligible to be discharged. People should also understand the differences between the two types of bankruptcies they are most likely to file.
An increasing number of people in Houston and across the country are finding it difficult to pay the bills for their store-branded credit cards. Delinquencies of 60 days or greater on the payments for these bills have gone up to 4.65 percent as of May 2018, an increase from 4.08 percent in March 2017. This is the highest rate of default that Equifax, the credit bureau, has seen for this type of card since 2011. The agency warned that it could be a sign of growing trouble for household debts across the board.
According to an infographic from Supermoney that draws on a report from the credit agency Experian, the average credit card debt of people in Texas falls somewhere in the middle of the national average. People in Iowa carry the lowest balances with an average of $5,155. Alaskans have the highest at $8,515. In Texas, the average is $6,902.