12 Worst Cities for Financial Distress

High unemployment and high inflation in recent years have weighed on Americans, and many still are in financial distress despite significantly improved conditions. In a new report, the personal finance website WalletHub says that people in financial distress have a credit account that is in forbearance or has its payments deferred, which temporarily allows the account holder not to make payments because of financial difficulties. "Getting out of the downward spiral of financial distress is no easy feat," WalletHub analyst Cassandra Happe said in a statement. "You may get temporary relief from your lenders by not having to make payments, but all the while interest will keep building up, making the debt even harder to pay off." The report compared the 100 largest U.S. cities to find out where Americans are experiencing the biggest financial headaches. Researchers combed through data, current as of Feb. 1, from the U.S. Census Bureau, Administrative Office of the U.S. Courts, Google Ads and WalletHub. They compared the cities across nine key metrics in these overall categories:

• Credit score, including average score for the fourth quarter of 2023 and the year-over-year score
• People with accounts in distress, as of the fourth quarter and year-over-year change
• Average number of accounts, as of the fourth quarter and year-over-year change
• Change in bankruptcy filings, December 2023 vs. December 2022
• "Debt" search interest index
• "Loan" search interest index

They then determined each city's weighted average across all metrics to calculate its overall score. "People who find themselves in financial distress should budget carefully, cut non-essential expenses, and pursue strategies like debt consolidation or debt management to get their situation under control," Happe said. See the accompanying gallery for the 12 U.S. cities with the most financially distressed populations, according to WalletHub.