Texas Ranks as Most Financially Distressed State in 2025

America's financial outlook has been unstable in recent years, challenged by inflation, fluctuating unemployment, public health crises, and natural disasters. For many, this has led to difficulty paying bills and financial distress, which WalletHub defines as "having a credit account that is in forbearance or has its payments deferred, meaning the account holder is temporarily allowed to not make payments due to financial difficulty."

To assess how location impacts financial troubles, WalletHub analyzed the 50 states across nine key measures, including average credit score, change in bankruptcy filings, and the share of people with accounts in distress.

"Measuring the share of residents in financial distress is a good way to take the pulse of a state and see whether people are generally thriving or having trouble making ends meet," WalletHub analyst Chip Lupo said. "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."

Texas, despite having one of the top 10 largest economies in the world and a larger GDP than most countries, ranks as the most financially distressed state in 2025. Its struggles are evident in several areas:

• Residents have the ninth-lowest credit score,
• Third-highest number of accounts in forbearance or with deferred payments per person,
• Seventh-highest share of people with distressed accounts (7.1%).

Over the past year, Texas also saw a 22% increase in non-business bankruptcy—the sixth-highest jump among states. High search rates for "debt" and "loans" indicate Texans are desperate to borrow despite existing debt.

The analysis also found differences between red and blue states. Republican-majority states like Texas averaged higher financial distress (20.94) than Democratic-majority states (32.95).

Top 10 States with the Most Financial Distress

Overall rank	State	Total score	Credit score rank	People with accounts in distress rank	Average # of accounts in distress rank	Change in bankruptcy filings rank	"Debt" search interest index rank	"Loans" search interest index rank
1	Texas	62.45	13	8	7	6	13	5
2	Florida	61.52	9	1	2	5	32	25
3	Louisiana	61.50	21	7	1	31	22	2
4	Nevada	58.11	3	9	13	15	11	8
5	South Carolina	56.49	30	2	4	34	22	5
6	Oklahoma	55.95	27	16	19	28	6	3
7	North Carolina	53.53	33	4	8	20	32	20
8	Mississippi	52.11	2	14	15	35	46	1
9	Kentucky	52.07	39	3	3	43	27	10
10	Alabama	50.80	23	10	17	38	27	4

Data by WalletHub

Top 10 States with the Least Financial Distress

Overall rank	State	Total score	Credit score rank	People with accounts in distress rank	Average # of accounts in distress rank	Change in bankruptcy filings rank	"Debt" search interest index rank	"Loans" search interest index rank
50	Hawaii	19.99	4	42	40	47	50	50
49	Vermont	21.41	12	50	50	25	48	49
48	Alaska	29.24	48	43	38	49	16	34
47	Oregon	29.57	40	37	46	23	47	38
46	New Mexico	31.60	16	38	43	17	49	30
45	West Virginia	33.17	44	25	24	44	32	38
44	New Jersey	34.20	32	31	30	32	36	44
43	Maine	34.94	47	34	44	12	38	41
42	Maryland	36.17	28	33	36	29	32	41
41	Wisconsin	36.34	42	36	39	22	36	25

Data by WalletHub