The Geography Of Debt In America
A while back I did a guest post on Millennial Money Man about the Geography of Student Loan Debt in America. Well this post is about the geography of overall debt in America.
The Urban Institute used 2016 data derived from a random sample of deidentified, consumer-level records from a major credit bureau as well as Census Bureau data to make this interactive map of debt in collection status in America.
Bad news up front – about a third of American households are in debt to the tune of around $13 trillion dollars. That’s with a “t”.
When seen geographically the data is fascinating in many ways. I could click endlessly to discover trends and patterns, but I’m a geography nerd, and proud of it 🙂
The map shows a few things, and at the county level:
- The share of people with any debt in collection
- For those that have debt in collection, the median amount they have
- The share of people with medical debt in collection
- For those that have medical debt, the median amount they have
- The share of people without health insurance
- The average household income by county
The data also breaks these down by white and non-white population.
What’s the definition of “Debt In Collection”. This is from the Urban Institute:
Debt in collections includes past-due credit lines that have been closed and charged-off on their books as well as unpaid bills reported to the credit bureaus that the creditor is attempting to collect. For example, credit card accounts enter collections status once they are 180 days past due.
Remember, having debt in collection is no small thing. It can affect your credit score, make it difficult to borrow money or qualify to rent or buy a home. In some cases it could even prevent you from getting a job.
Here’s the percent of the population with debt in collection:
Percentage of population with debt in collection status
Notice the red area I circled. The upper midwest & Mississippi valley area (especially Minnesota) clearly stands out on this map. It’s a pretty large homogenous area with low overall debt in collection status.
Remember this is a percentage of people with debt in collection, not total people. So even though the population of this area might be sparse in some sections, that doesn’t matter, a percentage is a percentage.
For some reason there’s a pretty consistent pattern of low “debt in collection” status here that crosses parts of 5 or 6 states but is geographically mostly contiguous.
Some Things Are Expected
It’s clear to see that in general, the areas with the highest average household incomes have the lowest percentage of people with debt in collection. That’s expected. But focus there on two words – in collection. I guarantee those high income areas have pretty high levels of total debt though!
One would hope that a household with an average household income of say $143,000 like Fairfax County VA near me better not have debt in collection. They can afford to at least make their debt payments, even if it’s the bare minimum.
Conversely, the south has lower incomes and a higher poverty rate, so it’s no surprise that they have higher percentages of people in debt collection status.
I’m a “geographic snoop”, so I found this data to be a goldmine. They allow you to download a .csv file on the site so I went at it!
The first thing that came to my mind being a personal finance-ish blogger is to look to find the counties that have a higher than average income, but also higher than average percentage of people with debt in collection.
So here’s what I did. There are about 3000 counties in America. I looked at the highest 20% of counties (600 counties) for the percentage of people with debt in collection. Then I checked if any of those counties were also in the top 20% for average household income.
In other words, I’m trying to rat out the people who have a top 20% household income but are also in the top 20% for debt in collection. Let’s go!
I present to you the counties with the highest percentage of their respective population that have debt in collection, but who also have average household incomes in the top 20% of American counties. This is only the top 5, there were more.
| COUNTY | % of Pop. in Debt Collection | Average Household Income |
| La Salle County TX | 64% | $72,807 |
| Ector County TX | 57% | $81,301 |
| Andrews County TX | 54% | $87,975 |
| Lea County NM | 52% | $73,254 |
| Beckham County OK | 49% | $73,828 |
Yikes. These counties have half or more of their population in debt collection but still have household incomes in the $70 – $90k range.
LaSalle County TX, what is going on there folks! A full 64% of you have debt in collection status. I imagine there’s a lot of repo men in that county. (By the way if you’re an Accidental FIRE reader from LaSalle County TX I’m sure you’re an outstanding citizen. Please subscribe if you haven’t yet 🙂
Best And Worst For Overall Debt In Collection
The state with the highest percentage of it’s population having debt in collection status – Louisiana. A full 46% of Louisianans have debt in collection status.
The state with the lowest? Minnesota. Only 17% of Minnesotans have debt in collection status.
The county with the highest percentage of it’s population having debt in collection status – Allendale County South Carolina. A whopping 68% of people in that county have debt in collection status!
The county with the lowest? Cook County, Minnesota. Only 6% of folks in that county have debt in collection status. Maybe there’s a lot of personal finance bloggers in Cook County MN.
Best And Worst For Medical Debt In Collection
The state with the highest percentage of it’s population having medical debt in collection status – Alabama. A full 30% of Alabamans have medical debt in collection status.
The state with the lowest? A tie between Wisconsin and Wyoming. Only 5% of folks from those two states have medical debt in collection status.
The county with the highest percentage of it’s population having medical debt in collection status – a tie between Denali Borough, Alaska and Fairbanks North Star Borough, Alaska. Both have 52% of their populations with medical debt in collection status.
The county with the lowest? Holmes County, Mississippi. According to the data, 0% of folks in that county have debt in collection status.
It’s Complicated
The 50 states and 3000+ counties in America have a myriad of laws and regulations that have an impact on these numbers. For medical debt in particular, states have widely differing implementations of the ACA, and whether they elected to expand Medicaid or not. Additionally consumer protection, credit, and collection laws differ greatly and no doubt impact these numbers.
I find the idea of geoarbitrage very desirable in the future, so it’s my intention to continue to expose financial and money information from a geographic point of view in hopes that it can aid in a possible relocation decision for my readers or anyone out there.
Also be sure to check out my Geoarbitrage Resources Page that has tons of great tools to help you find your perfect location.
Damn, I knew is was bad. But close to 70% of the population are in debt collection in some states?! That’s insane!
It is a bit insane. There are apparently a lot of collection employees out there…
Really interesting information. Counties with over 50% of its citizens in debt collection seems insane. How is possible that over half of the people have collection agencies coming after them? Or maybe the “debt in collection” definition means something else?
Love your stats and info posts! Super interesting. Keep ’em coming.
TPP
Nope, the definition is in the post – the credit companies are “attempting to collect” the debt. I’ve never had it happen to myself, but I assume that means harassing phone calls and other means.
Thanks for the kudos!
I’ve had them call… Heckling me to get to family members that are in collection. They are ruthless.
Yikes – good luck with the family!
Fantastic work! You took it to the next level with this post, my friend. I’m also a geography wonk, as if my last post didn’t scream it.
I think it’d be an interesting exercise to overlay this onto the Blue Zones Happiest Cities map. I think we’d probably find very few of those spots with over 30% in debt collection.
Since this is a county based map, just like the USDA’s natural amenities map, you could easily overlay the two. I think you’d find an interesting inverse correlation between living in geographically average places (like Minnesota) – with low debt, vs. geographically sunny and warm (like the sunbelt) having high debt. Sounds a bit like Europe, actually.
Thanks dude! There are TONS of possibilities to marry up the geographic data. It’s a specialty of mine. It’s also A LOT of work…. so we’ll see. Stay tuned!!
That’s a very interesting post, all Americans should look into this.
Greetings from Bucharest, Romania 🙂
Thanks for the compliment Codrut!
Now to go Google all those high debt areas to see what the F they are spending their money on over there. Have they all chipped in to have the streets paved in gold?
Ha – I doubt Google will give you their spending habits. I’m guessing it could be more related to student/house/medical debt. Those three can really add up so fast and sink anyone.
Very interesting! I know that many Germans and Scandinavian immigrants tended to settle in the northern regions where there seems to be lower debt collection levels. I wonder if there is also a cultural aspect at play here? Can’t say for certain but just a guess. I’m sure the higher incomes help as well!
Woah, very cool. I should look into that as far as the upper-midwest trend. I find this kind of stuff fascinating if you can’t tell.
Thanks for that input!
I wonder if the statistics miss out on people who have already declared bankruptcy. My niece is an example. She was a drug addict and racked up big time medical bills. After successful rehab, I helped her file Chapter 7. Up until then, the collectors hounded her all the time. Now that is all off the books. I believe she would not show up on these statistics, so there may be even more to the story.
That’s a great question Susan! I can always count on you to dive into the heart of the matter and ask the best questions. I read the site and the sources they linked to pretty thoroughly and saw no mention of that, so my ‘guess’ is no. It’s likely just the current state of folks as of 2016 data.
So yes indeed, there’s more to the story, From my understanding declaring bankruptcy is something that lasts for 7 years on your record, so one could assume that the data on that could be pulled as well from the credit agencies.
Thanks for the great comment as always!!
Interesting analysis. To my untrained eye it appears as if cities are much more prone to debt then rural. I wonder if that’s due to availability of debt or something else.
Good question. Or it could be that city dwellers tend to behave differently regarding debt. There are more stores/restaurants etc in cities. Basically more ways to part with your money. But I’m just grasping at straws with that one
Fascinating data! Thanks for picking through it. What the heck is up with Texas?
I know, seriously. Maybe steer cost a lot of money? Can you put those on a card? 😉
Happy to do my part for Minnesota and have no debt in collections! Fascinating stuff!
I hope not – if you did it would be the big blog post we’re all waiting for 😉
Keep doing Minnesota proud!
Texas is in trouble. The map is very interesting. It looks like Portland is one of the better county in Oregon. That’s unexpected too. I thought the cost of living is too high and a lot of people are having problems here. There are more and more homeless people. It’s pretty crazy.
I have no idea what the Texas thing is. Maybe they have weird consumer debt laws, who knows. But collection agencies have lots of jobs down there for sure!
I read from another blog that three cities(Dallas, San Antonio, Houston) in Texas were in the top 5 in credit card debt. I think there is something about the Lone Star State that gives people down there to build up debt for some reason.
Everything’s bigger in Texas, including the debt! ….thanks, I’ll see myself out.
Holy cow. Those counties where debt in collections is over 50%… insane. And then it’s completely normal for those growing up there.
Yep, probably not a good example to set for the kiddos..
Very enlightening. Also totally disturbing. I had no idea it was quite that bad in terms of percentages of people under debt collection. Even the state with the lowest is still 17% – that’s more than I would have guessed.
Same here… had you asked me to guess before I found that data I would have guessed lower on all numbers across the board.
Nice graphics!
Thanks man!
Alabama is high on medical debt because no Medicaid expansion, insurance monopoly by bcbs of Alabama keeps out competition, poor health habits, and just a poor state
Thanks for the insight on Alabama. When doing this article I considered adding which states did Medicaid expansion but it got way too complicated very quickly. There’s all sorts of levels and flavors of Medicaid expansion, and it’s not a black/white issue.
As for health & lifestyle, the deep South is indeed very bad on that. The highest obesity rates in the country are in the South.
New England is doing pretty good as well. Interesting data and thanks for running the numbers, I love this type of stuff.
Yes, overall NE looks good. It’s on my top three areas for permanent retirement so woo-hoo!
And if you like this keep checking in, there’s more to come 😉
This is a fascinating article and map. Thanks for putting it together.
I was born in Georgia and live in South Carolina – two of the states with a lot of the highest debt collection % on the map. I’m sure the causes are complex. But the patterns on the map look peculiarly similar to historical, racial, and poverty trends. These were the areas with brutal slavery in the 1800s, brutal civil rights experiences in the 1900s, and still some racial/political issues today (the Charleston shooting a couple of years ago).
And South Carolina was definitely one of the states that didn’t expand medicaid, so that hasn’t helped. We also have only one insurance company on the Obamacare exchange. So, it’s tough medically and otherwise for people who don’t have a lot of means. And from what I know of those areas, they’re very rural (not urban), so there aren’t a lot of job opportunities.
I love my states for many other reasons, so I’m not knocking them. But we’ve still got a long way to go economically and socially – especially for the larger number of people in poverty.
The legacy of slavery certainly can be seen in the map. But the South – both black and white – certainly have higher poverty and deep economic issues. And the Medicaid expansion issue is a big thing, and also can be seen in various patterns on the map.
Thanks for stopping by Chad!
Thanks for keeping these lovely data-y posts coming! And those good folk in the upper Midwest would be embarrassed with you exposing their money sensibility by drawing attention to it with that bold red line 🙂
Ha, maybe the rest for the country will now be asking them for a loan!
And you’ll be happy to know there are more data-y posts in the works!!
This map looks like it probably has a high correlation with rates of obesity.
Hmmmm… THANKS for that idea. I might just try to do something with that 😉
Thanks for stopping by!
Scary to see how much people spend these days on frivolous things. Credit cards are great tools that can give you travel perks and all, but paying them off weekly, or even daily should be in the forefront.
I LOVE credit cards because of course they give me free stuff for simply living my life the way I would anyway. But yes, with that perk comes discipline
Ohio (where I’m from) is a little darker than I’d like it to be, but it’s not the darkest. It’s also interesting how there’s almost a gradient pattern to the map – not too many sudden changes from no debt to massive debt.
The patterns are always neat to see. I’m still fascinated by the upper midwest, how the low debt is homogeneous and crosses all those states.