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Why some Americans are more likely to be in debt

Kentucky ranks eighth on a top 10 list that isn't a cause for celebration for the state's residents. It's a list of the 10 states with the most residents who have debt in collection. Forty percent of Kentucky's residents have overdue debt, which is more than the national average of 33 percent.

Experts say that the problem tends to be worse in areas of the country where people have lower incomes and there are larger nonwhite populations. Louisiana, the state with the highest percentage of residents in debt, is 41 percent nonwhite. The state with the lowest percentage of resident with overdue debt is Minnesota, which has a nonwhite population of only 19 percent.

But income also matters. Nonwhite residents in Minnesota average higher incomes than nonwhite residents in Louisiana. The same is true for white residents of these states.

Having higher income could help to pay the bills, but there is another problem: health care costs. People who don't have health insurance can face high medical bills. Older Americans, despite having generally more health care needs, actually have less medical debt than millennials. This is because older Americans have Medicare, while many younger adults are uninsured. The problem of having to pay medical bills out of pocket can be compounded when people use credit cards to pay them. According to NerdWallet, 27 percent of Americans use credit cards to pay their medical expenses.

The rise in medical costs has exceeded income growth in the past decade, according to NerdWallet. Leaving medical bills unpaid or paying them with credit cards are two options that can lead to the same result: bills that can't be paid. People who find themselves in debt that they cannot afford to pay could choose to file for bankruptcy. Bankruptcy can help a person to reorganize their debt and get on the path to paying it off.

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