Experiencing financial strife is a nightmare of many Americans, but it appears to be a looming reality for Texans, according to a just-released WalletHub study ranking Texas the No. 1 most "financially distressed" state in America.

To determine the states with the most financially distressed residents, WalletHub compared all 50 states across nine metrics in six major categories, such as average credit scores, the share of people with "accounts in distress" (meaning an account that's in forbearance or has deferred payments), the one-year change in bankruptcy filings from March 2024, and search interest indexes for "debt" and "loans."

Joining Texas among the top five most distressed states are Florida (No. 2), Louisiana (No. 3), Nevada (No. 4), and South Carolina (No. 5).

Texas' new ranking as the most financially distressed state in 2025 may be unexpected, WalletHub says, considering the state has a "bigger GDP than most countries" and still has one of the top 10 best economies in the nation (even though that ranking is also lower than it was in previous years).

Even so, Texas residents are stretching themselves very thin financially this year. Texans had the ninth lowest average credit scores nationwide during the first quarter of 2025, the study found, and Texans had the sixth-highest increase in non-business-related bankruptcy filings over the last year, toppling 22 percent.

"Texas also had the third-highest number of accounts in forbearance or with deferred payments per person, and the seventh-highest share of people with these distressed accounts, at 7.1 percent," the report said.

This is where Texas ranked across the study's six key dimensions, where No. 1 means "most distressed:"

• No. 5 – "Loans" search interest index rank
• No. 6 – Change in bankruptcy filings from March 2024 to March 2025 rank
• No. 7 – Average number of accounts in distress rank
• No. 8 – People with accounts in distress rank
• No. 13 – Credit score rank and “debt” search interest index rank

At least Houston isn't as expensive to live in as other Texas cities like Dallas or Austin.

On the other side of the spectrum, states like Hawaii (No. 50), Vermont (No. 49), and Alaska (No. 48) are the least financially distressed states in America.

The top 10 states with the most people in financial distress in 2025 are:

• No. 1 – Texas
• No. 2 – Florida
• No. 3 – Louisiana
• No. 4 – Nevada
• No. 5 – South Carolina
• No. 6 – Oklahoma
• No. 7 – North Carolina
• No. 8 – Mississippi
• No. 9 – Kentucky
• No. 10 – Alabama