Collection agents often have to find the right cord to pull when speaking with an individual and persuading him or her to make payments on unpaid debts. The results of a survey show that talking to individuals about how getting out of debt — especially medical debt — can help them get into a better living situation may be a great way of enticing them to start making payments.
Nearly 40% of buyers and renters said that medical debt was the reason they were denied a mortgage or being approved for a rental opportunity, according to data released last week by Zillow. Medical debt was far and away the most common type of debt to have kept people from improving their living situations, according to the survey. About 25% of buyers and renters cited student loan debt or credit card debt as the reasons they were denied a mortgage or rental opportunity.
“When we focus on low unemployment and the strong economy, we often forget that in many ways the rising costs of life can erode most of those gains,” said Skylar Olsen, Zillow’s director of economic research, in a statement. “Health care has never been more expensive. Getting a college degree, a path more likely to lead to economic success for those able to get through it, has never been more expensive. U.S. housing values and rents have never been more expensive. While incomes, both at the high and low end, are growing, the pace hasn’t kept up with those crucial life expenses. That’s fact and Americans are feeling it.”
Individuals with medical debt were also less likely to be able to afford a $1,000 emergency expense than those who do not have medical debt, according to the survey.
While those with medical debt were most likely to be denied a mortgage, individuals with student loan debt are actually putting off buying a house or moving into a nice apartment, according to the survey.
