Texas Ranked #1 for Financial Distress in New Study

Everything is bigger in Texas!  You hear that quote all the time, but sometimes the bigger isn't always the better. Especially when it comes to financial disaster.

Texas has the second-largest economy in the U.S., according to the Texas Economic Development Corporation, and the eighth-largest economy in the world.

One would think that with having the second-largest economy, most Texans would be ok financially, but that is not the case.

People love to spend, and sometimes that spending comes as a cost. Financial distress. People constantly worry if they are going to be able to pay their bills or if they will even have a job in a week.

That is stressful and distressing.

Texas is the #1 State in the U.S. for Financial Distress

A WalletHub study found that Texas is the number one state in the United States in financial distress.

What exactly is financial distress?

Investopedia tells us that financial distress is a condition in which a company or individual cannot generate sufficient revenues or income, making it unable to meet or pay its financial obligations.

Why is Texas in Such Financial Distress?

• 3rd highest number of accounts in distress per person.
• 7th highest share of people with distressed accounts (7.1%).
• 9th lowest average credit score in Q1 2025.
• 3rd highest interest in “debt” based on Google search trends.
• 4th highest interest in “loans” searches.
• 6th highest increase in bankruptcy filings.

Read More: Rich People Jobs in Texas That Can Build Real Wealth

How Do Texans Get Out of Financial Debt?

• Prioritize Debt: figure out what needs to be paid down or off the fastest
• Make a Budget: If you need help, talk to a credit counselor
• Consider a Debt Relief Program: They can help consolidate your debt or help with settlement or management plans. If all those don't work or fail, you may need to consider filing for bankruptcy.
• If All Else Fails, Consider Bankruptcy: No one wants to file for bankruptcy, but it might be the best choice.

Read More: Pay with Gold? New Texas Law Says You Can

If financial distress continues to grow, it will start affecting more and more people.  Financial distress can cause more unemployment, fewer investments, and people spending less. Which in turn means it will hurt the economy.