More than 35 Percent of American Adults are Currently in Collections: Report

A joint study from the think tank Urban Institute and debt buyer Encore Capital Group released today reported that more than 35 percent of U.S. adults with a credit report have accounts that qualify to be in some stage of the debt collection system. The average balance of those accounts is $5,178.

The study, “Delinquent Debt in America,” looked at a sample of TransUnion consumer credit reports in September 2013 to determine how many delinquent accounts were noted on the reports and how many collection tradelines could be found. In addition, the study’s authors looked at closed and/or charged off accounts still being reported to determine if they were eligible for collections, even if there was not a specific note of collection on the credit report.

“Collection accounts” for the purpose of this study included direct reports from collectors, accounts that had been charged-off and either sold or outsourced, accounts still being worked in-house after charge-off, and accounts being warehoused by creditors.