Dallas is among five Texas cities that ranked in the top ten nationwide for the most people in financial distress during the pandemic, according to a recent study.
“One of the factors that contributed to the five Texas cities ranking in the top ten is the large percentage of people with accounts in distress and the high interest in Google searches related to debt and loans,” said Wallet Hub analyst Jill Gonzalez.
Wallet Hub ranked San Antonio at No. 5, Fort Worth at No. 7, Houston at No. 8, Dallas at No. 9 and Austin at No. 10. The study found that the average number of accounts in distress was 64.76 for Dallas.
Financial distress is defined by Wallet Hub as accounts for which either the payments have been deferred, or only the interest is paid, according to Gonzalez. They also include accounts in forbearance and accounts for which payments have been deferred due to natural disasters.
“The state of Texas has been gravely affected by the pandemic,” she said. “Some of its most important industries such as construction, real estate or retail were among those that took a serious hit when the pandemic started, and the state’s economy suffered from this.”
The survey’s data sets included number of bankruptcy filings, the average credit score and the share of people with accounts in distress.
“When in financial distress, you should only stick to the necessities, and cut off all other types of expenses,” Gonzalez told Dallas Express. “Having an emergency account or money in a savings account is the best way to ensure you can cope in the event of an unexpected situation as was the pandemic.”
The Wallet Hub study further found that 41.74% of Dallas residents had accounts in distress in Nov. 2020 and that there were 2,900 searches on google for the term loans by Dallas residents.
“Much like other states, Texas lost a lot of jobs because of the pandemic, and the unemployment rate surged,” Gonzalez said in an interview. “There was also a lot of struggle from residents to receive unemployment benefits. All of this caused people to fall into financial hardship and not be able to pay their bills or debts.”
In recent months, the economy has improved resulting in the average credit score increasing by more than 2.5% and personal bankruptcy filings by Dallas residents decreasing by 22.19%.
“With the roll out of vaccines, and more and more people getting vaccinated, businesses are able to reopen and people are going back to their jobs. Dallas authorities can continue to encourage people to get immunized, but also respect the social distancing measures that are in place and wear a mask wherever necessary,” Gonzales added. “This is the best way to ensure that the economy restarts and people’s financial situations improve.”