The numbers behind Delaware’s consumer debt
By Kathy Canavan
Special to Delaware Business Times
The national government shutdown is baring the number of Americans at all income levels living paycheck to paycheck.
Four out of 10 adults say if they were faced with an unexpected $400 expense, they would not be able to cover it unless they sold something or borrowed money, according to the Federal Reserve Board’s 2017 Report on the Economic Well Being ofU.S. Households.
More than one in three Delawareans has debt that is in the collections phase – and nonwhite residents are more than twice as likely to have debt in collections as white residents.
Delawareans have a slightly higher share of debt in collections than Americans in general, according to an ongoing study by the Washington-based Urban Institute.
About 36 percent of state residents have a debt in collections. The median debt in collections in Delaware is $1,302.
One in five Delawareans has a medical debt in collections. The median amount in collection is $538. Medical debt is the most common form of debt in collections, according to Signe-Mary McKernan, one of study authors.
Fifteen percent of state residents carry student loan debt. The median amount is $18,667 – and 14 percent of Delaware loan holders have some amount of debt in collections.
One out of three residents carries a car loan, slightly more than the national average. Four percent of those loans are delinquent.
- In Sussex County, 30 percent of residents have a debt in collections. The median debt in collections
- About 32 percent of Sussex residents carry car loans, and 3 percent of those loans are delinquent.
- Only 11 percent of Sussex residents have student loans. The median loan is $17,105 and 14 percent of student loan holders have some amount collections. The median amount in collections for Sussex residents is $9,322.
- Only 15 percent of Sussex residents had a medical debt in collections and the median amount was $472 – lower than the state median.
- In Kent County, four out of 10 residents have a debt in collections. The median debt in collections is $1,583, according to the Urban Institute.
- About 36 percent of county residents carry auto loans, and 5 percent of those loans are delinquent.
- Fifteen percent of Kent County residents have student loan debt. The median loan is $17,668. Fourteen percent of those loans are in collections. The median debt in collections is $8,763.
- More than one in five Kent Countians carry medical debt that is in collections. The median amount in collections is $681.
New Castle County
- More than one in three New Castle County residents has a debt in collections. The median debt in collections is $1,250.
- Almost one in four county residents has a medical debt in collections, and the median debt amount is $525.
- About 17 percent of county residents carry student loans. The median loan amount is $9,286. Thirteen percent of student loans are in collections. The median amount in collections is $7,519.
- One in three county residents has an auto loan. Four percent are delinquent.
Loan statistics by race
Credit bureaus do not break down debt statistics by race, but the Urban Institute, a social and economic policy nonprofit, produced loan figures based on generally whiteand generally nonwhite ZIP codes in an attempt to spotlight barriers to wealth building for nonwhites.
According to the institute’s figures on Delaware loans, the number of medical loans to nonwhites that landed in collections was exactly double the number of loans to whites. Thirty six percent of loans to nonwhites went to collections in Delaware. Nationally, 16 percent of loans to whites and 21 percent of loans to nonwhites went to collection.
In Delaware, 14 percent of white Delawareans and 22 percent of nonwhite Delawareans carry student loans. Twelve percent of white students’ loans are in collections, while 20 percent of nonwhite students’ are.
“Having debt in collection creates problems not only for today but for tomorrow,” McKernan said. “Having a lower credit score will make it difficult for you to start a small business. Borrowing will cost more. A bad credit report may make you ineligible for jobs. It may limit your access to rental housing or insurance.”