1 in 3 adults behind on debt payments - WTVM.com-Columbus, GA News Weather & Sports

1 in 3 adults behind on debt payments


About 77 million adults across America are behind on their debt payments, according to a new study conducted by Urban Institute. 

That's about one in three adults who are struggling to pay their debts on time.

The study looked over credit card bills, medical bills and even parking tickets. The South also had the highest number of people with debt in collections.

Murray Solomon with Raymond James Financial Services said he is not surprised by the new study.

"Psychologically, we are enticed to want to buy this or that," Solomon explained. "It's not that we actually need it. We just want it."

Solomon said maintaining a good credit score has been an on-going problem, but it has increased in recent years.

"We had a problem since 2008," Solomon explained. "When we had high unemployment and we had financial crisis in our country, and around the world as well. That's added an additional burden, because people haven't been able to find jobs, and they have been laid off."

Solomon said people struggling with their debt payment or low credit scores can follow tips and advice that may help them in the long run. He recommends opening up a savings account, paying debt on time, and disciplining yourself to spend only a specific amount of money per month, and avoid spending more than you have.

"Open up a savings account," Solomon said. "Put in small amount of money every month. Many people don't mean to get into financial troubles, but emergencies arise, and they need to have an account set up so they can use the money when they need it the most."

Solomon advises that people avoid late payments to avoid problems. Paying debts off on time is important.

"You don't want to ruin your credit score," Solomon said. "When you want to buy something or get a mortgage, buy a car or another credit card or even get that loan, this may not happen, because of your low credit scores. You may not even be able to get that job you want, because many employers today will look at your credit record."

The study explained the creditors can follow one of three options once they are put into collection, and companies demand the borrowers to pay the money back.

"Companies can either write off that loan their creditors have taken and forgive them, which rarely happens," Solomon said. "The account can also be sold to a debt buyer who will then hound you for the money that you owe, plus interest and other charges they want to put on you. It can hurt the creditors in the long run. People will have to go through some extra trouble to pay their bills. So this could hurt your credit scores if you are unable to pay back the interest, and other expenses relating to the collecting the money back from you."

Solomon also recommended people seek credit score counselors for guidance, if necessary.

"There are counselors out there that might be helpful to the individuals," Solomon said. "If you are in deep trouble, or you don't know how to take care of your credit record, seek help as soon as you can."

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