States with the Most Individuals in Monetary Misery in 2023

The previous few years have been a whirlwind for Individuals’ funds, with inflation, fluctuating unemployment, public well being crises and pure disasters making it arduous for individuals throughout the nation to pay their payments. Finally, many individuals have ended up in monetary misery, which WalletHub defines as having a credit score account that’s in forbearance or has its funds deferred, which means the account holder is briefly allowed to not make funds as a result of monetary issue.

In an effort to make clear the monetary troubles skilled by individuals throughout the U.S., and to indicate the place these difficulties are most pronounced, WalletHub in contrast the 50 states and the District of Columbia throughout 9 key metrics. Our knowledge set consists of elements like the common credit score rating, the change within the variety of chapter filings between September 2022 and September 2023, and the share of individuals with accounts in misery.

cassandra happe

“Monetary misery is usually a vicious cycle. Individuals who can’t make funds on their accounts find yourself damaging their credit score scores, which in flip makes it harder for them to qualify for the very best options to their debt. In case you are in monetary misery, a number of the finest choices to pursue are debt settlement, debt administration and free credit score counseling. In case your credit score rating hasn’t been broken an excessive amount of but, you might be able to save some huge cash via debt consolidation.”

Cassandra Happe, WalletHub Analyst

Fundamental Findings

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States with the Most Individuals in Monetary Misery

General Rank* State Whole Rating Credit score Rating Individuals with Accounts in Misery Common Variety of Accounts in Misery Change in Chapter Filings September 2023 vs. September 2022 “Debt” Search Curiosity Index “Loans” Search Curiosity Index
1 Louisiana 50.44 7 3 2 9 43 2
2 Mississippi 48.56 49 15 15 7 24 1
3 Texas 45.25 6 10 8 4 18 8
4 Tennessee 45.06 32 4 3 15 21 8
5 Nevada 43.66 23 2 4 11 38 17
6 South Carolina 42.41 39 5 7 22 15 5
7 Alabama 42.41 19 9 10 35 16 2
8 District of Columbia 42.35 50 48 50 1 1 35
9 Georgia 40.65 29 7 6 10 41 11
10 Kentucky 40.65 41 8 11 8 21 19
11 Oklahoma 40.24 27 16 16 19 18 4
12 Arkansas 39.56 47 13 13 16 6 19
13 New York 39.14 21 28 33 3 6 23
14 North Carolina 37.91 46 11 9 12 29 17
15 Missouri 36.00 8 17 18 39 6 13
16 South Dakota 35.71 3 37 25 40 2 11
17 Kansas 34.78 33 29 17 34 13 6
18 Delaware 34.77 12 19 28 25 16 13
19 Idaho 34.75 26 46 48 24 3 13
20 Florida 34.57 14 12 14 42 18 22
21 Illinois 34.42 20 14 12 23 43 26
22 Oregon 33.78 9 27 27 2 46 37
23 Alaska 33.03 5 45 42 20 11 23
24 North Dakota 32.82 9 44 31 27 4 29
25 Maryland 32.12 35 25 40 5 24 38
26 Hawaii 31.28 2 6 5 44 49 47
27 Utah 31.21 1 31 19 36 10 44
28 Indiana 30.71 48 18 21 37 13 28
29 Vermont 30.08 40 1 1 50 51 51
30 California 29.82 11 20 20 21 33 40
31 Michigan 29.28 30 21 23 18 41 31
32 Minnesota 29.15 24 26 22 14 33 41
33 Virginia 29.02 22 34 37 17 33 31
34 Ohio 28.55 44 47 47 29 31 8
35 Washington 28.08 14 41 39 6 46 47
36 Arizona 27.98 28 22 24 43 21 27
37 Colorado 27.97 17 39 29 26 27 41
38 Pennsylvania 27.65 31 35 32 28 33 31
39 Nebraska 27.52 16 40 43 45 9 35
40 West Virginia 27.37 38 33 44 46 4 29
41 Iowa 26.85 51 50 49 13 11 19
42 Wisconsin 26.05 13 30 30 41 29 34
43 Connecticut 26.01 45 32 36 30 24 44
44 Montana 23.88 42 42 45 33 31 41
45 New Mexico 23.72 18 24 41 51 38 13
46 Wyoming 23.24 4 43 46 49 50 7
47 New Jersey 22.75 25 36 35 32 48 49
48 Rhode Island 22.57 34 49 38 48 27 23
49 Maine 21.75 36 23 26 47 43 38
50 Massachusetts 21.59 37 38 34 38 38 50
51 New Hampshire 20.54 43 51 51 31 33 44

Word: *No. 1 = Most Distressed

In-Depth Have a look at the Most Financially Distressed States

Louisiana

Louisiana is the state the place persons are in essentially the most monetary misery, which is smart on condition that it’s extraordinarily susceptible to pure disasters and has the second-highest poverty fee within the nation. Round 11.6% of Louisianans have a credit score account the place they’ve briefly been allowed to not make funds as a result of monetary issue, the very best share within the U.S.

Being late on funds sadly hurts individuals’s credit score scores within the Bayou State. The typical credit score rating in Louisiana is 642, the third-lowest within the nation, in response to WalletHub’s proprietary knowledge. That’s solely simply above the brink for honest credit score, at 640.

Curiously, Louisiana’s next-door neighbor is subsequent to it within the rankings as effectively.

Mississippi

The state within the second-most monetary misery is Mississippi, partially as a result of the truth that it’s the state with the very best poverty fee, at over 19% in response to the most recent Census knowledge. Poverty naturally makes it tough for individuals to pay their payments, and Missisippians search Google for “loans” greater than individuals in some other state. It is a signal of underlying monetary issues that contribute to the state’s residents having the bottom common credit score rating within the nation, at 634. That’s in unfavorable credit ratings territory, however shut sufficient to honest credit score to get there with just a few months of accountable credit score use.

Texas

Texas is the state experiencing the third-most monetary misery, which could appear counterintuitive, on condition that Texas is the eighth largest financial system on the earth, with a much bigger GDP than most nations. Nonetheless, Texans are having quite a lot of financial struggles, together with a rise of greater than 21% in non-business chapter filings up to now 12 months. Practically 7% of the state’s residents have an account in forbearance or with deferred funds, too, which is within the high 10 within the U.S.

The typical credit score rating in Texas is within the honest credit score vary, although, at 661. Whereas residents aren’t at risk of slipping into the unfavorable credit ratings vary, they nonetheless have almost 40 factors to enhance earlier than they’ll attain good credit score.

Change in Credit Score October 2023 vs. October 2022

Lowest

  • 1. Utah
  • 2. Hawaii
  • 3. Alaska
  • 4. Wyoming
  • 5. South Dakota
Change in Credit Score October 2023 vs. October 2022

Highest

  • 47. Indiana
  • 48. Arkansas
  • 49. Mississippi
  • T-50. District of Columbia
  • T-50. Iowa
Change in the Share of People with Accounts in Distress October 2023 vs. October 2022

Highest

  • 1. Vermont
  • 2. Hawaii
  • 3. Illinois
  • 4. Nevada
  • 5. California
Change in the Share of People with Accounts in Distress October 2023 vs. October 2022

Lowest

  • 47. New Hampshire
  • 48. Missouri
  • 49. Delaware
  • 50. District of Columbia
  • 51. Iowa
Change in the Average Number of Accounts in Distress October 2023 vs. October 2022

Highest

  • 1. Vermont
  • 2. Hawaii
  • 3. Illinois
  • 4. Nevada
  • 5. North Dakota
Change in the Average Number of Accounts in Distress October 2023 vs. October 2022

Lowest

  • 47. New Mexico
  • 48. Missouri
  • 49. District of Columbia
  • 50. Iowa
  • 51. Delaware
Change in Bankruptcy Filings September 2023 vs. September 2022

Highest

  • 1. District of Columbia
  • 2. Oregon
  • 3. New York
  • 4. Texas
  • 5. Maryland
Change in Bankruptcy Filings September 2023 vs. September 2022

Lowest

  • 47. Maine
  • 48. Rhode Island
  • 49. Wyoming
  • 50. Vermont
  • 51. New Mexico

Present Extra

Pink States vs. Blue States

blue vs red image financial distress

Methodology

In an effort to decide the states the place persons are in essentially the most monetary misery, WalletHub in contrast the 50 states and the District of Columbia throughout 9 key metrics in six total classes: 1) Credit score Rating, 2) Individuals with Accounts in Misery, 3) Common Variety of Accounts in Misery, 4) Change in Variety of Chapter Filings – September 2023 vs. September 2022, 5) “Debt” Search Curiosity Index and 6) “Loans” Search Curiosity Index. WalletHub defines an account in misery as one which both is in forbearance or has its funds deferred.

We then decided the weighted common throughout all metrics to calculate an total rating for every state and used the ensuing scores to rank-order the states.

Credit score Rating – Whole Factors: 16.66

  • Common Credit score Rating October: Double Weight (~11.11 Factors)
  • Change in Credit score Rating – October 2023 vs. October 2022: Full Weight (~5.55 Factors)

Individuals with Accounts in Misery – Whole Factors: 16.66

  • Share of Individuals with Accounts in Misery in October: Full Weight (~8.33 Factors)
  • Change within the Share of Individuals with Accounts in Misery – October 2023 vs. October 2022: Full Weight (~8.33 Factors)

Common Variety of Accounts in Misery – Whole Factors: 16.66

  • Common Variety of Accounts in Misery in October: Full Weight (~8.33 Factors)
  • Change within the Common Variety of Accounts in Misery – October 2023 vs. October 2022: Full Weight (~8.33 Factors)

Change in Chapter Filings September 2023 vs. September 2022 – Whole Factors: 16.66

“Debt” Search Curiosity Index – Whole Factors: 16.66

“Loans” Search Curiosity Index – Whole Factors: 16.66

 
Sources: Information used to create this rating had been collected from the Administrative Workplace of the U.S. Courts, Google Traits and WalletHub knowledge.

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