77M Americans Have Debt in ‘Collections’

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EUGENE, Ore. — Americans have a delinquent debt problem, according to a study by The Urban Institute.

Debt in collections involves a non-mortgage bill, such as a credit card balance, medical or utility bill that is more than 180 days past due.

The study found the debt in collections ranged from as little as $25 to $125,000.

Also according to the study, nearly 12 million adults have non-mortgage debt reported past due, and they need to pay about $2,200 on average to become current on that debt.

Furthermore, 77 million Americans have debt in collections reported in their credit files with an average debt amount of nearly $5,200.

Oregonians are no exception. The average amount of credit card debt is $8,200.

A local financial counselor with Debt Reduction Services in Eugene says the average American has just under four credit cards, which can quickly add up.

Taz Nelson says in making payments on credit cards and other types of debt, it’s important to pay just above the minimum monthly payment. It will typically only pay the interest and not the principal. Nelson says the best way to get out of debt is to stop spending.

“The fastest and easiest way to get out of debt is to stop getting deeper into debt. Stop using the credit cards, stop using the charge accounts, and start paying your debts off instead of using your credit to incur more debt,” Nelson said.

Nelson says it can be tough when you’re in a hole, but credit counseling can help you re-organize your spending and get you back on track.

It’s not one easy fix. Nelson says getting out of debt depends on a lot of factors, including your income level, how determined you are, and healthy spending habits.

The study is based on records from credit reporting agency TransUnion.

Note: CNN contributed to this report.

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