Findings

Early findings show that unsecured debt – debt that is not backed by collateral – is very common among low-income residents of New Haven. Credit card debt was the most common form of debt, followed closely by student loan debt. While these types of debt are not necessarily a problem, they can cause difficulties if not paid on time. Of the 1/3 of survey participants with at least one credit card that they used regularly, more than half (57%) said that they always or usually carry their balance forward. Of the 1/3 of participants with student loan debt, 1/4 were up to date with payments, 10% were repaying but were behind, 40% had deferred their loan or were in forbearance, and 12% were in default.  Car loans were the most common form of secured debt – of car owners (about 50% of those surveyed), 40% owed on a car loan. Ten percent of those with a car loan were in arrears.

Debt arising from unpaid bills is never good. Of participants responsible for a utility bill, 35% were behind on at least one bill – most often their electricity bill.  Twenty-five percent had had either their lights or gas disconnected at least once during the last 7 years – of them, 2/3 had experienced it more than once, and 16% had been disconnected four times or more. Of renters, 12% were behind on their rent at the time of taking the survey. Twenty percent of participants owed medical debt.

Just under 1/3 of participants owed money to friends or family – interestingly, of this group, 1/3 also were owed money by friends or family. This shows how important social network support is, but also shows that people struggling themselves often have to support others.

Less common types of debt that people reported included very costly loans from rent-to-own stores, buy-now-pay-later retailers, pawn shops, and payday lenders. A considerable number had experienced bank overdraft; of those who had ever had a bank account, 15% had paid an overdraft fee once, 28% between 2- 5 times, and 22% five or more times. Sixteen percent currently owed a bank or credit union.

Among people who were currently or had ever received disability benefits (17% of participants), a third had been asked to repay an overpayment to the social security administration (SSA) at some point; 19% were currently repaying an overpayment to the SSA.

Some groups struggle more than others. For example, people with a child under 18 years of age were more than twice as likely as those without children to be behind on their rent, and almost three times as likely to have utility arrears. They were also more likely to owe money to friends or relatives, and to report being extremely stressed about their financial situation.

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