Which states have the most people experiencing financial distress?

The last few years have been a whirlwind for Americans’ finances with the covid pandemic, inflation, tariffs, fluctuating unemployment, public health crises, natural disasters, and the cancellation of government programs making it difficult for people across the country to pay their bills.

Many people have ended up in financial distress in which they have a credit account that is in forbearance or has its payments deferred, meaning the account holder is temporarily allowed to not make payments due to financial difficulty.

About 8.8 million Americans having at least one credit account where they are late on their payments or have been allowed to delay them.

To take a look at the financial troubles experienced by people across the United States and to show where those difficulties are most pronounced, WalletHub, a personal finance website, compared the 50 states across nine key metrics. The data include factors such as the average credit score, change in the number of bankruptcy filings between March 2024 and March 2025, and share of people with accounts in distress.

Here are the top findings from the WalletHub report “States with the Most People in Financial Distress.” 

“Measuring the share of residents in financial distress is a good way to take the pulse of a state and see whether people are generally thriving or having trouble making ends meet,” said Chip Lupo, WalletHub analyst.

Lupo said Texas is the state experiencing the most financial distress, which is demonstrated by the fact that residents had the ninth-lowest average credit score in the country in the first quarter of 2025. Texas also had the third-highest number of accounts in forbearance or with deferred payments per person, and the seventh-highest share of people with these distressed accounts, at 7.1percent.

Let’s hope the economic situation will improve soon and fewer Americans will be living paycheck to paycheck.