There are a lot of nationwide problems that are being discussed by politicians and the news media these days. Immigration concerns currently top the list, but other problems, like highway funds and student loan debt, are certainly issues that have an impact on Americans in every state, including California. However, there is apparently at least one large issue that does not seem to garner much attention, but that affects nearly one-third of all Americans: debt obligations that have been folded into the collections process.
According to a recent report, a study by the Urban Institute determined that approximately 77 million American adults have debts that are currently in the collections process. That is one in three American adults.
Like many issues, no matter how nationwide the impact may be, there is always a difference between the states. For instance, the study determined that Nevada had the largest percentage of adults with debts in collections, while North Dakota had the lowest. California seems to be right in the middle of the pack.
A debt obligation can end up in the collections process, when a debtor falls too far behind on making even minimum payments. The resulting impact can be a poor credit problem that can dog a person for years if it is not resolved. And, if the problem persists, creditor harassment can become an even more troubling issue for the debtor than the inability to secure loans. For anyone in California who finds themselves facing this type of financial hardship, oftentimes the most logical solution is filing for bankruptcy. Doing so can stop creditor harassment and provide real debt relief for someone who just cannot seem to work through their financial challenges in any other way.
Source: WSBT, "1 in 3 US adults have 'debt in collections'," Jeanne Sahadi, July 29, 2014