Kentucky has one of the highest rates of delinquent debt in the country

Experts say stagnant wages and large retiree population lead to higher rates in the South

The Urban Institute, a Washington-based think tank, has released a report showing that a shockingly high percentage of Americans are struggling to pay off debts. The report found that over a third of Americans with credit files currently have a debt that is in collections, according to the International Business Times. The problem is particularly acute in southern states, including Kentucky, where the percentage of people with debts in collections routinely soars above the 40 percent mark.

Southern states suffer most

While the report found that debt is high nationwide, it pointed out that the problem is particularly bad in the South. Of the 13 states that have a debt delinquency rate above 40 percent, 11 of them are located in the South. Nevada, which was where the Great Recession was sparked in 2008, has the highest debt delinquency rate at 47 percent. Kentucky, however, was not too far behind at 41.9 percent.

The biggest causes of the high debt rates were medical bills, student loans, and credit cards. The average debt across the U.S. was over $5,000. Additionally, another report found that people who currently had a debt that was at least 30 days past due would have to pay over $2,250 on average just to become current on those debts.

Wages fail to keep up with inflation

Experts gave a number of reasons for why southern states were so particularly bad hit by the debt delinquency rates. According to the Lexington Herald-Leader, wages in the South, especially in the construction and services industries, have failed to keep up with wages elsewhere. In many cases, people must choose whether to pay down a debt or buy food and shelter for their families.

The experts also say that southern states have a much higher retiree population than other states. Since retirees often have lower and fixed incomes, they often have a difficult time paying debts and are more likely to be disproportionately affected by high medical bills.

Legal help dealing with debt

In many cases, people who are struggling to keep up with mounting debts feel tempted to hide from creditors, especially if they've been receiving harassing and threatening phone calls from collection agencies. While debt can make many people feel helpless, by contacting an experienced attorney many of those people will be able to take the first step to becoming debt free.

A highly qualified bankruptcy attorney, for example, can help people explore their options for getting out of debt. For many consumers, declaring bankruptcy may be the best option for resetting their finances. Furthermore, an attorney can help keep creditors at bay and can help put an end to unwelcome creditor phone calls.