Debt doesn’t discriminate on the basis of geography, demographics or vocation. Through no fault of their own, folks from all over the world can find themselves in tricky financial situations that can have lasting ramifications for their careers, personal relationships and long-term plans.
In the United States, the picture is the same. We might have one of the world’s most dynamic and innovative economies, but the consumers who drive our economic growth engine aren’t immune to financial pressures and pitfalls. Consumer debt touches every corner of America and often leaves hardship in its wake. Meanwhile, small business owners must deal with obligations of their own.
Types of Debt
Americans contend with several main forms of debt that can be broken into two broad categories.
Common unsecured debts in the United States include:
- Credit card bills
- Medical bills
- Collections/repossessions
- Business debts
- Personal credit lines
Common types of secured debts include:
- Mortgage loans
- Auto loans
- Liens and certain types of collections
- Student debt
- Tax debt and government loans
- Lawsuits
Statisticians use all of these forms of debt as well as less common types of credit to paint a broad picture of debt in America. One of the most important metrics that these professionals use is known as “total household debt.” As its name implies, total household debt is a tally of all of the obligations that a particular household owes to its creditors. State-level and nationwide total household debt averages can provide hints about the overall health of the national economy.
Total Household Debt
It might not surprise you to learn that the average household struggles with a mountain of debt. According to a recent report by the New York Federal Reserve, total household debt in the United States sits well above $11 trillion. This figure peaked at about $13 billion during the financial crisis of the late 2000s and has since declined somewhat, but it remains at unhealthy levels.
About $8 million of this debt comes in the form of mortgage loans and other housing-related obligations. Most of the remainder is tied up in auto loans, credit card bills and medical expenses. It should be noted that business debts aren’t counted as part of this figure.
The Top 10 States for Household Debt
When it comes to household debt figures, there are clear winners and losers among the 50 states. According to MSN Money and Credit.com, the 10 states with the highest rates of revolving household debt include:
- Washington State: Although its average household debt figure comes in at over $26,000, the state does have a relatively high average consumer credit score.
- Vermont: With just a hair more debt than Washington and a fairly high average credit score, Vermont is in a similar position.
- Texas: With revolving household debts of about $26,100 and a nation-leading average auto loan debt figure of nearly $20,000, Texas has some work to do.
- Oklahoma: Unfortunately, Oklahoma is one of the only states with a household debt rate that exceeds its per-capita income figure.
- Virginia: Although they’re highly leveraged, Virginia’s affluent consumers tend to manage their debt well.
- Maryland: Again, Maryland’s affluence helps it keep its default rates surprisingly low.
- Colorado: This state’s booming real estate economy is creating high levels of mortgage and credit card debt.
- South Dakota: As the heart of the nation’s credit card industry, this sparsely populated state is close to the source of many forms of debt.
- Wyoming: This state’s energy-fueled economy encourages consumers to make risky credit card purchases.
- Alaska: Basic goods tend to be more expensive in Alaska, so consumers often need to use credit for everyday purchases.
Credit Card Debt by State
Although the above-mentioned states have the highest rates of revolving household debt, they don’t necessarily boast the highest rates of credit card usage. The Washington Post recently commissioned a study that focused more narrowly on average state-level rates of credit card debt. Some of its findings were surprising.
For starters, consumers in the Northeast and South tended to have higher rates of credit card debt. Places like Georgia, North Carolina, New Jersey and Massachusetts all made it onto the Post’s list. Sunbelt states like Texas and Arizona also fared poorly in this study.
By contrast, Midwestern and Great Plains states tended to have more manageable rates of household credit card debt. With the exception of Illinois, these states’ credit card debt rates remained below the national average. In particular, Iowa distinguished itself as the only state with average household credit card debt of less than $4,000.
Taking the Next Steps To Get Debt Relief
No matter how your debt situation stacks up to that of your friends and neighbors, you don’t have to join the fight against your obligations alone. At National Debt Relief, we’re proud to work with folks from all walks of life to achieve meaningful debt reductions. It’s our mission to make your financial future as bright as possible.
Although we serve clients from coast to coast, we never offer a one-size-fits-all solution. In fact, it’s important to remember that financial regulations and debt-related laws vary markedly from state to state. While most of these rules adhere to similar frameworks, there’s enough variation at the state level to warrant some caution.
Below, we outline the most important guidelines for each state and district in the country. Use these as a starting point on your journey to reduce your debt burden.
While National Debt Relief has a broach geographical reach and has helped thousands of regular folks achieve meaningful debt reduction, we don’t operate in every state. However, we’re happy to recommend state-specific debt relief providers or offer additional support to folks who live in the areas that we don’t serve.
Finally, it’s crucial to note that an additional layer of federal regulation supersedes the state-level laws that we outline below. When a specific state law conflicts with these general federal guidelines, national law generally takes precedence. Take a moment to familiarize yourself with some important information about federal debt relief laws.
Find out more about each State and see what rules you need to be aware of.
National Debt Relief‘s services are not available in all states. In states where we do not operate, we may be able to refer you to a debt relief provider who can help you.
For more information about State Laws, you can visit your local Attorney General.