How Consumer Debt In Utah Changed During The Pandemic
At the height of the COVID-19 pandemic, the country’s unemployment rate rose to 15%, reports the Bureau of Labor Statistics. The impact on American workers was immediate, as many lost their paychecks or their wages collapsed overnight. By and large, however, the economic damage from the pandemic proved not as devastating in much of the country as many had first predicted.
The majority of Americans felt a lack of money, but different polls show mixed results. Partly because of government economic controls, extended unemployment benefits, and a more vigilant look at their spending, Americans seem to have weathered the economic turmoil pretty well – at least so far.
According to the nonprofit think tank Urban Institute, most Americans have topped up their bank accounts and kept spending in check. The average amount of nationally collected debt rose just under $ 16 between February and October 2020, rising from $ 1,833 to $ 1,849 – although that amount varies by state.
In Utah, the median debt on collections rose from $ 1,891 to $ 1,966 between February and October 2020. The $ 75 change is the fifth largest increase among the 30 states reporting increases in median debt collection companies.
Although typical collection debt levels rose in the early months of the Utah pandemic, other key financial indicators improved. Probably due to certain provisions of the CARES Act, the mortgage default rate fell from 1.9% in February 2020 to 1.1% in October 2020. The law, passed in March 2020, required government-sponsored lenders to suspend mortgage collection of borrowers in single-family homes when they are in financial distress due to the pandemic.