New Jersey cities rank among most financially distressed nationwide

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A pair of cities in New Jersey ranked among the cities with the most people in financial distress because of the COVID-19 pandemic.

The new analysis, conducted by WalletHub, ranked Newark at No. 96 and Jersey City at No. 98.

Because of the pandemic, “people are struggling financially,” and that means “people are finding it difficult to meet their current financial obligations,” WalletHub analyst Jill Gonzalez said in an email.

“This can lead to drops in credit score, being late on their bill payments, racking up more debt, or even filing for bankruptcy,” Gonzalez added.

Las Vegas ranked at the top of the list, followed by Chicago and Houston. Anchorage, Alaska, and Madison, Wisconsin, rounded out the bottom two cities.

“Residents from the top cities have low average credit scores,” Gonzalez said. “They also registered a larger search interest for things like debt and loans.”

To assemble its list, WalletHub examined data across nine metrics for the 100 largest cities “without data limitations.” The review did not include Lexington, Kentucky; St. Paul, Minnesota; or St. Petersburg, Florida.

As part of their review, they looked at the change in the number of bankruptcy filings, accounts in distress and credit scores.

In September, the average credit score for Newark residents was 652, up 3.9 percent from January. In Jersey City, the average credit score for residents was 695, up more than 3 percent since January.

Between June 30, 2019, and June 30, 2020, the number of bankruptcy filings for Newark residents decreased by nearly 26.9 percent. The number of bankruptcy filings for Jersey City residents decreased by more than 23 percent during that same period.

In neighboring New York, New York City (No. 12) and Buffalo (No. 81) ranked among the top 100, as did a pair of Pennsylvania cities – Philadelphia at No. 19 and Pittsburgh at No. 84.

“It will take a long time for the economy to recover and people’s financial struggles to end,” Gonzalez said. “A significant amount of damage has already been done, and even if the health crisis ends shortly the recovery will be long term. The communities will start to recover slowly as soon as businesses reopen and people go back to their jobs.

“The best thing authorities can do to help, is take measures to ensure residents’ safety in public places,” Gonzalez added. “Both consumers and businesses should receive coronavirus support, and safety protocols should be put in place.”

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