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Collection rates in US stable at 35 percent

According to a new report, more than 35 percent of Americans have some debt in collections.

A new report by the Urban Institute, in collaboration with the Consumer Credit Research Institute, stated more than 35 percent of Americans with credit have some debt in collections. That percentage equates to approximately 77 million people in the U.S., and on average, each person owes $5,178.

The Urban Institute researchers analyzed credit information of 7 million people from TransUnion's 2013 credit data. The debts in collection are more than 180 days past due and vary from credit card balances to medical and utility bills, but do not include mortgage debt. The study did not break the debt down by type, so it's unknown which categories of debt are most likely to be sent to collection.

Additionally, 5.4 percent of Americans with credit are past due on some of it, meaning it's between 30 and 180 days late, according to the report.

Collection rates throughout the US
The highest concentration of both past due and debt in collections is in the southern portion of the U.S. with a rate of 39.8 percent in the South Atlantic region, 41.3 percent in the southeast central area and 43.6 percent in the southwest central area, according to the report. The lowest concentration is in the Midwest, where there collection rate is 33.8 percent in the northeast central region and 27.4 percent in the northwest central region.

The state with the highest percentage of debt in collection was Nevada at 47 percent. On the other end of the spectrum, Minnesota, North Dakota and South Dakota each have debt collection rates at about 20 percent, The Washington Post reported.

Though the rates may be different depending on the locality, debt affects every community, said Caroline Ratcliffe, one of the authors of the report.

Collection rates not unusual high
While the high percentage of debt that is overdue and in collections may be worrisome, the Urban Institute has determined the rate remains stable. The organization collected data from the U.S. Federal Reserve in 2004 and found 36.5 percent of Americans had debt in collections at that time, the Credit Union Times reported.

While the rate may be stable for the U.S., debt in collections can be difficult at the individual level, according to the report. Delinquent debt can lower people's credit scores and decrease their abilities to get loans, mortgages and raise their insurance premiums and interest rates.