Credit Infocenter

Delinquent Debt Statistics and What to do About Them

Written by: Kristy Welsh

Last Updated: July 15, 2017

Falling behind on your monthly payments can be a pretty powerless feeling. The good news is, there is always something you can do to get control of your debt and not to become another delinquent debt statistic. Below are four common debt scenarios along with what you can to do avoid getting further and further into debt.

1 out of 20 people are at least 30 days late on a credit card or other non-mortgage account (e.g., automobile loan, student loan).

Being late on a credit card payment is one thing. Being 30 days late (or more) is quite another. That’s when you get reported to the credit bureaus and your credit starts taking a hit.

So, if you’re in the habit of paying late – on credit cards or anything else — it’s time to snap out of it.

It’s not only costing you in the form of late fees, but also in a lowered credit score that means higher interest rates going forward or the inability to qualify for new credit at all.

What to Do About It

  • Pay the bill as soon as you get paid, even if that means sending it in before the due date. This way you cannot be tempted to divert those funds toward something else.
  • Revisit and revise your budget so you can stop spending more than you earn.

Among people with debt past due, the average amount they need to pay to become current on that debt is $2,258.

You need not have over $2,000 in delinquent debt for it to feel too intimidating to tackle. It’s all relative to how much you have left over to put toward your debt at the end of the month, which may be nothing at all.

What to Do About It

  • Look at your budget, red pen in hand, and start slashing everywhere you can. Can you cancel cable? Cut your food budget in half? Move into a cheaper place?
  • Look at your work. Could you be making more money somewhere else? Could you take a part-time job or side hustle? Start looking around.
  • Put all extra money saved and earned toward your debt…period.
  • Communicate with your creditors, letting them know you’re taking steps to get caught up.

35 percent of people with credit files have debt in collections reported in these files.

Once a debt goes into collections, your problem is compounded. You’re not only behind on your debt payments; you’re also being hounded for them by unrelenting debt collectors.

What to Do About It

  • Confirm you actually owe the debt and not a scam.
  • Confirm you are still legally required to pay the debt via debt validation and the statute of limitations (for details, see #4 below).
  • Don’t ignore them. The problem will only get worse and could result in a lawsuit.
  • Do the math to figure out how much you can afford to put toward the debt every month.
  • Work out a payment plan with the debt collector. Just be sure not to agree to anything you know you cannot swing. Otherwise, you’re sure to fail.
  • Know your rights. There are a number of things that debt collectors cannot legally say or do.

Among people with a report of debt in collections, the average amount owed is $5,178.

If you have thousands of dollars of debt in collections, it may seem insurmountable. But people climb their way out of debt every day, and there’s no reason you cannot be one of them.

What to Do About It

  • Try debt validation. This can be an especially effective tactic for old credit card debt. And more time your debt has been sold from one collector to the next, the less likely they have supporting documents to prove you owe the debt at all.
  • Check the statute of limitations in your state. Once it passes, you’re no longer legally required to pay the debt. Debt collectors won’t let you know this though. It’s up to you to know your rights.
  • For any debts that cannot be eliminated via debt validation or the statute of limitations, negotiate a payment plan to wipe the slate clean once and for all.

Read the Urban Institute’s Delinquent Debt in America in its entirety.