States with the Most People in Financial Distress During COVID-19

Adam McCann, WalletHub Financial WriterSep 9, 2020

Adam McCann, WalletHub Financial Writer
Sep 9, 2020

The COVID-19 pandemic is one of the biggest public health crises the U.S. has ever faced, but it has been almost as devastating to Americans’ finances as it has to their health. Between hospital bills and sky-high unemployment, the pandemic has put millions of Americans in financial distress. While the CARES Act helped mitigate some of that damage earlier in the year, the lack of a new bipartisan deal has left many people wondering how they will meet their financial obligations.

In order to shed light on the financial troubles experienced by people across the U.S., and to show where those difficulties are most pronounced, WalletHub compared the 50 states and the District of Columbia across nine key metrics. Our data set includes factors like the average credit score, the change in the number of bankruptcy filings between January and July, and the share of people with accounts in distress. WalletHub defines an account in distress as one which either is in forbearance or has its payments deferred. Read on for the results, a comparison of red states and blue states, and a complete description of our methodology.

Table of Contents

Main Findings

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States with the Most Financially Distressed People during COVID-19

Overall Rank*	State	Total Score	'Credit Score' Rank	'People with Accounts in Distress' Rank	'Average Number of Accounts in Distress' Rank	‘Change in Number of Bankruptcy Filings - July vs. January’ Rank	‘“Debt” Search Interest Index’ Rank	‘WalletHub “States Where People Need Loans the Most Due to Coronavirus”’ Rank
1	Louisiana	52.65	12	2	3	36	5	17
2	Nevada	48.74	31	1	4	13	21	36
3	Indiana	47.70	5	15	21	7	34	23
4	Oklahoma	47.01	1	31	40	8	26	2
5	Florida	46.50	45	6	5	24	3	6
6	Texas	46.09	9	9	15	31	8	9
7	South Carolina	45.86	7	5	8	33	21	32
8	Kansas	45.36	19	19	7	9	13	26
9	District of Columbia	44.98	49	7	9	49	1	39
10	New York	44.90	28	26	28	43	2	1
11	Missouri	44.69	17	16	12	23	7	4
12	Utah	44.55	41	10	1	4	50	33
13	Idaho	43.32	24	12	14	3	48	38
14	Kentucky	43.20	3	23	36	29	8	15
15	North Carolina	43.18	11	13	11	32	20	12
16	Delaware	43.17	33	3	2	25	41	42
17	Alabama	43.07	6	14	20	40	13	19
18	Georgia	43.01	10	4	6	51	34	16
19	Tennessee	42.54	2	11	25	47	39	3
20	Wyoming	42.03	13	44	45	2	47	43
21	Arizona	41.22	21	22	23	5	26	40
22	Hawaii	40.97	48	8	18	10	8	18
23	South Dakota	40.47	20	24	24	1	43	50
24	Virginia	39.70	18	25	22	26	8	28
25	Arkansas	39.61	4	32	26	41	21	21
26	Iowa	39.36	37	17	19	11	21	27
27	Mississippi	37.17	8	33	13	46	17	41
28	Illinois	36.49	27	18	16	42	26	20
29	Ohio	36.22	23	28	29	28	26	10
30	Pennsylvania	35.85	14	38	30	37	34	14
31	New Mexico	35.64	22	20	10	15	48	47
32	Wisconsin	35.28	34	43	39	16	6	35
33	West Virginia	35.15	15	35	34	17	51	11
34	Maryland	34.97	38	21	17	50	16	5
35	Michigan	34.94	36	37	33	39	4	8
36	Washington	33.10	16	45	41	30	26	13
37	Colorado	32.64	32	46	43	14	26	29
38	California	32.20	25	41	47	27	26	30
39	Rhode Island	31.44	50	34	37	19	17	22
40	Maine	30.94	39	30	27	12	43	45
41	New Jersey	30.93	40	27	31	48	17	25
42	Nebraska	30.40	35	36	38	22	21	44
43	Connecticut	29.00	44	29	35	35	34	34
44	North Dakota	28.57	26	47	32	20	43	46
45	Minnesota	25.84	47	50	48	34	26	7
46	Oregon	24.97	29	48	49	38	41	37
47	New Hampshire	24.89	51	42	46	45	13	24
48	Alaska	24.86	42	51	51	6	8	49
49	Massachusetts	23.96	46	40	50	44	39	31
50	Montana	23.65	43	49	42	18	38	48
51	Vermont	21.81	30	39	44	21	43	51

*1=State with the Most Distressed Accounts
artwork covid distress

Red States vs. Blue States

blue vs red image distress

Methodology

In order to determine the states where people are in the most financial distress during COVID-19, WalletHub compared the 50 states and the District of Columbia across nine key metrics in six overall categories: 1) Credit Score, 2) People with Accounts in Distress, 3) Average Number of Accounts in Distress, 4) Change in Number of Bankruptcy Filings - July vs. January, 5) “Debt” Search Interest Index and 6) WalletHub “States Where People Need Loans the Most Due to Coronavirus” Score. WalletHub defines an account in distress as one which either is in forbearance or has its payments deferred.

We then determined the weighted average across all metrics to calculate an overall score for each state and used the resulting scores to rank-order the states.

Credit Score – Total Points: 16.66

Average Credit Score in August: Double Weight (~11.11 Points)
Change in Credit Score - August vs. January: Full Weight (~5.55 Points)

People with Accounts in Distress – Total Points: 16.66

Share of People with Accounts in Distress in August: Full Weight (~8.33 Points)
Change in the Share of People with Accounts in Distress - August vs. January: Full Weight (~8.33 Points)

Average Number of Accounts in Distress – Total Points: 16.66

Average Number of Accounts in Distress in August: Full Weight (~8.33 Points)
Change in the Average Number of Accounts in Distress - August vs. January: Full Weight (~8.33 Points)

Change in Number of Bankruptcy Filings - July vs. January – Total Points: 16.66

“Debt” Search Interest Index – Total Points: 16.66

WalletHub “States Where People Need Loans the Most Due to Coronavirus” Score – Total Points: 16.66

Sources: Data used to create this ranking were collected from American Bankruptcy Institute, Google Trends and WalletHub data.

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