Debt Dilemma! More North Carolina Consumers Than Ever in Collections

North Carolina consumers are deep in debt and many in collections

Image source: Flickr Creative Commons User Joe Shlabotnik

Research group the Urban Institute has released a study titled Debt in America that shows the money woes with which many North Carolina consumers are suffering. In the South Atlantic region (which includes North Carolina, South Carolina, Florida and Georgia), nearly 40% of consumers have debt in collections. This region has the fourth highest debt amount in collections compared to regions in the rest of the country.

On average, consumers in the South Atlantic region have roughly $5,300 of debt turned over for collections. In our state, the average amount of credit card debt is close to $6,000 and interest rates average 13%. This debt amount puts us mid-range in the US for credit card debt, although consumers in our state seems to be paying this more modest debt later than most.

Another study showed that total revolving debt in North Carolina is close to $11,000, on average. This includes not only credit card debt but store cards, home equity lines of credit and checking account overdraft lines of credit. This is a good bit of overall debt considering that the median income in NC is less than $47,000. This means that, on average, we owe 23% of our annual earnings on revolving debt alone.

Another study reinforces North Carolina's debt dilemma, this one conducted by Equifax a couple of years ago. Equifax rated America's 20 communities most deep in credit card debt. North Carolina had the most cities that made the list with six. Here are the NC communities that made the “most in debt” list:

#1 Wilmington - $7,300 in average credit card debt, which represents close to 18% of median income

#6 Asheville - $6,431 in average credit card debt, which represents close to 16% of median income

#9 Fayetteville - $6,519 in average credit card debt, which represents close to 15% of median income

#10 Winston/Salem - $6,505 in average credit card debt, which represents close to 15% of median income

#15 Hickory/Lenoir/Morganton - $5,416 in average credit card debt, which represents close to 14% of median income

#18 Greensboro/High Point - $5,771 in average credit card debt, which represents close to 14% of median income

Although North Carolina has seen improving employment numbers, many remain hard hit. Even for those that have found a job, the backlog of debt that amassed during the recession and post-recession unemployment crisis may still be lingering. And if you cringe when the phone rings because you're one of the 40% of Tar Heels stuck in debt collections, you should know you have options.

Filing a Chapter 7 bankruptcy will eradicate all of your credit card debt, medical bills and most other unsecured debts. And, as soon as you file and your creditors receive notice, all collections activity will cease and you won't have to fear the ringing of the phone or checking your mail. To find out more about how a North Carolina bankruptcy can benefit you, contact the law offices of John T Orcutt for a free consultation today.