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Many Americans are finding it difficult to make ends meet as a result of increased costs for everything from food to rent in an uncertain economy.
They are even using credit to cover necessities. According to a recent LendingTree poll, 25% of people who utilize buy-now-pay-later loans have done so to purchase food.
However, some states are having more difficulties than others. According to a recent survey by WalletHub, which defines financial distress as having credit in forbearance or deferring payments owing to financial difficulty, Florida is now among the most financially stressed states in the nation, second only to another Southern state.
Chip Lupo, an analyst at WalletHub, commented on the findings, saying, “When you combine data about people delaying payments with other metrics like bankruptcy filings and credit score changes, it paints a good picture of the overall economic trends of a state.”
These five states are the most affected, along with the reasons why people there are suffering so much.
The top five states with the most financial distress
The states with the worst financial situations nationwide include Texas, Florida, Louisiana, Nevada, and South Carolina. Which states are doing the best? Hawaii holds that distinction, followed by New Mexico, Vermont, Alaska, and Oregon.
WalletHub ranked all 50 states based on nine important indicators in six areas, weighted the average of all data to arrive at an overall score. The “credit score” category, for instance, is based on two important metrics: the change in credit score from March 2024 to March 2025 received full weight, and the average credit score as of March received double weight.
Even though Texas has a higher GDP than most nations (ranked tenth globally), it still came out on top after all the figures were crunched. In this context, the number one ranking indicates that the state is the most distressed or worst off. Its economy remains in the top ten in the United States.
According to the WalletHub survey, Texans frequently search for “debt” and “loans” on Google, “which indicates that many people are desperate to borrow, despite already owing money.” In terms of the shift in bankruptcy files between March 2024 and March 2025, they came in sixth place, with non-business bankruptcy filings rising by more than 22 percent over the previous 12 months.
With the highest percentage of accounts in financial difficulty and the second-highest average number of distressed accounts per person, Florida was the second most financially distressed state in the nation overall. According to a prior WalletHub analysis, Floridians have the second-highest credit delinquency rate in the nation, and the state has the ninth-worst credit score ranking in the nation.
Louisiana came in third, surpassing both Florida (at number one) in the average number of distressed accounts and Texas (at number two) in the “loans” search index ranking. According to WalletHub, “the largest percentage in the nation, approximately 11.8 percent of Louisianians, also have a credit account in forbearance or with deferred payments.”
While South Carolina, at No. 5 overall, rated strongly in the number of persons with accounts in financial trouble and the average number of accounts in distress, Nevada, at No. 4 overall, had the third-worst credit score ranking in the nation (Montana was at the top).
What about the states with the least amount of financial distress? Despite having the fourth-worst credit score ranking, Hawaii emerged victorious. However, it did well in every other category, and it was the state with the fewest Google searches for “debt” and “loans,” in contrast to Texas.
How to handle financial difficulties
All states are experiencing some level of hardship, however Texas and Florida may be the worst affected. Three states (Hawaii, Vermont, and New Mexico) performed poorly on their credit score ranking out of the five states that the WalletHub study determined to be the least financially troubled.
A Ludwig Institute for Shared Economic Prosperity (LISEP) analysis shows that the bottom 60% of U.S. households (by income) do not meet the requirements for a minimal quality of life. (The research includes fundamental leisure expenses like streaming subscriptions as well as necessities like food and housing.)
It highlights how salaries haven’t kept pace with growing expenses; for instance, rent increased by 131% and medical premiums increased by 301% between 2001 and 2023.
Making a budget will help you understand how you’re spending your money and identify areas where you may make savings if you’re having financial difficulties.
Take action if you’re behind on your bill payments. “Take action before a debt collector intervenes. According to consumer guidance from the Federal Trade Commission, “tell your creditors what’s going on and try to work out a new payment plan with lower payments you can manage.”
Mortgage payments are no different. Get in touch with your lender if you’re having trouble before they foreclose on your house. Your lender may temporarily reduce or postpone your payments or work with you to extend your repayment time if you’re behaving in good faith. This would result in lower total payments.
In order to prevent a negative impact on your credit score, you should make at least the minimum payments on your credit card debt each month. You should concentrate on paying this off as soon as possible, along with any other high-interest obligations, because interest rates are so high right now, averaging about 24%. This can be accomplished by using debt-reduction techniques like the avalanche or snowball methods.
You could also want to explore for other kinds of income, including taking on a side project, retraining for a new career or function that pays more, or finding passive income like renting out a room in your house.
Although paying off debt is difficult, there are tools that can assist, such as inexpensive credit counseling services. You can get free counseling from a HUD-certified counselor about housing issues by contacting your local U.S. Department of Housing and Urban Development office.
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Chris began his writing as a hobby while attending Florida Southern College in Lakeland, Florida. Today he and his wife live in the Orlando area with their three children and dog.
