Debt Delinquencies’ Impact on Certain States and Individuals

By Roy Urrico

To identify where U.S. citizens are facing the greatest difficulties managing debt, WalletHub analyzed proprietary user data from the first quarter of 2025 its 2025 States Where People Are the Most Delinquent on Debt Report . The ranking is based on both the percentage of individual tradelines that were delinquent and the share of residents’ total loan balances that were delinquent. Mississippi, Louisiana, West Virginia, Alabama and Arkansas ranked in the top five.

“Being delinquent on debt can lead to fees, credit score damage, increased interest rates and other negative repercussions. That is why it is important to get current as quickly as possible. For many types of debt, you will have at least 30 days after your due date to make your payment before the lender officially reports it as ‘late’ to the credit bureaus. Many lenders also offer hardship programs that can allow you to temporarily forgo payments due to financial difficulty,” said WalletHub Analyst Chip Lupo.

To determine the states most delinquent on debt payments, WalletHub compared states across two key metrics in the first quarter: percentage of tradelines delinquent and percentage of loan balance delinquent. Data used to create this ranking was collected as of May 21, 2025 from WalletHub’s database.

Mississippi’s Debt Delinquency Problem

About 14.3% of individual loans and lines of credit in Mississippi were delinquent in the first quarter of 2025, the highest percentage in the country, according to WalletHub.

“Mississippi does not just lead the country in the percentage of delinquent accounts, though – it is important to also look at the overall amount of debt that’s delinquent to get the full picture. When all the dollar amounts are added together, Mississippi residents are actually delinquent on nearly 13.1% of their overall debt,” noted Lugo. That is also the highest percentage in the country.

Louisiana is the second-most delinquent state, with residents’ delinquent on 13.1% of all their individual loans and lines of credit. Referring to the dollar amounts, Louisiana residents are delinquent on 11.9% of their entire debt, which is also the second-highest rate in the country.

West Virginia has the third-worst debt delinquency problem overall. As of the first quarter of 2025, 12.3% of individual loans and lines of credit in the state are delinquent. Those delinquent accounts represent 10.1% of the total dollar amounts of West Virginia residents’ debt.

Fed Data Confirms Delinquency Rise

The latest data on household debt from the Federal Reserve Bank of New York, released May 13, 2025, showed consumers paid down some of their credit card debt in the first quarter of 2025. But late-stage delinquencies (significantly past due on revolving debt) surged year over year. Student loan delinquencies also surged year over year.

Early delinquency rates remained steady for most types of debt, except for student loans, which underwent a sharp increase (from below 1% to nearly 8%), due to the resumption of reporting delinquent accounts after nearly five years of pandemic-related pauses.

Credit card delinquencies increased, with the rate of delinquencies over 90 days climbing to 12.3%, an 8.5% rise from the furth quarter of 2024 and the highest since the first quarter of 2011. Among consumers under 30, serious credit card delinquencies reached 10.3%, a 4.4% increase from a year ago.