There are really two ways to be poor. Some people just don’t earn much money. Almost 15 percent of Americans, or 47 million people, live below the poverty line1, according to the U.S. Census Bureau.
Then there are the people loaded up with debt. Even people with good jobs can owe so much on credit cards, student loans, or mortgages that, on paper, they’re worth less than zero.
About 14 percent of U.S. households fall into this category, with a negative net worth, according to an analysis this month by the New York Federal Reserve. Add up all their possessions—cash, property, retirement accounts—and subtract all their debts, and one in seven Americans ends up in the red.
Overall, U.S. households have $12.3 trillion in debt, according to another New York Fed report, released this week.
At least Americans are doing better at managing their debt than during the dark days of the housing bubble that led to the Great Recession. The total debt load is up 10 percent from the middle of 2013 but is 3.1 percent below its 2008 peak. The biggest improvement since the recession has been in housing debt, which is still more than $1 trillion below its peak.