WalletHub has identified Texas, Florida, Louisiana, and Nevada among the top states with residents experiencing the highest levels of financial distress
Meanwhile, research from the Mercatus Center and Governing Magazine pointed to states like Illinois, New Jersey, and Connecticut as having poor financial health due to high debt and massive unfunded pension liabilities.
It is important to note that different analyses use varying methodologies, which can lead to states appearing on one list but not another.
States with high resident financial distress (2024–2025)
The recent WalletHub analysis, which focuses on the financial struggles of a state's residents, identified the following states as the most distressed in the U.S.:
- Texas: Ranked first due to high rates of deferred payments, bankruptcy filings, and frequent online searches for "debt" and "loans".
- Florida: Ranked second, with residents experiencing high credit delinquency rates and increases in distressed credit accounts.
- Louisiana: Placed third due to high levels of housing and food insecurity, elevated poverty rates, and a high share of residents with deferred payments.
- Nevada: Ranked fourth, with residents having low credit scores and a high number of distressed credit accounts.
- South Carolina: In the fifth spot, with high rates of account distress and elevated bankruptcy filings.
States with poor overall fiscal health
Other analyses focus on the financial health of the state government rather than its residents. Key indicators include high debt, unfunded pension obligations, and budget imbalances.
- Illinois: This state has one of the largest unfunded pension liabilities in the nation, with funded ratios for several state pension plans falling below 50% in 2024.
- New Jersey: Facing some of the highest per capita debt and largest unfunded pension liabilities in the U.S..
- Connecticut: Known for having high total liabilities per capita and significant long-term unfunded pension liabilities.
- Kentucky: Struggling with one of the largest unfunded pension liabilities relative to its own-source revenue.