It's official: America is being crushed under a mountain of debt.

A new study by the Urban Institute says that over 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies. This means the bill is so overdue (generally at least 180 days) that the account has been closed and placed in collections.

That comes to 77 million souls who face the sleepless nights and anxiety that comes from an inability to meet debt obligations. These citizens owe an average of $5,178 each (median $1,349).

It's happening to us in all walks of life.

For some, it's an unpaid credit card bill. For others, it's a medical bill they couldn't pay on time. Students are behind on their debt payments. Homeowners can't pay their mortgages. From past-due gym membership fees to delinquent utility bills to unpaid parking tickets, Americans owe more than they can pay, and face damaged credit scores and job prospects once collection agencies get their hooks into them. This creates a vicious cycle in which people become less able to pay debts, which then continues to mount.

Urban Institute senior fellow Caroline Ratcliffe put it this way: "Roughly, every third person you pass on the street is going to have debt in collections. It can tip employers' hiring decisions, or whether or not you get that apartment."

Certain parts of the country are debt hotspots: Nearly half of the people living in Las Vegas, where the housing crisis hit hard, have debt in collections. Big chunks of the South are battlling debt, notably the cities of Orlando, Jacksonville, Memphis, Columbia, South Carolina, and Jackson, Mississippi. On the other hand, Salt Lake City, San Jose, and Seattle have the least amount of debt.

Many people dealing with debt collectors report bullying and harassment. But financial distress is a worry not just for the individual, but for famlies and communities, too. With increasing numbers of Americans living paycheck to paycheck, any emergency, big or small, can push them into financial hell. Psychologists and sociologists are beginning to explore the debt-stress connection and how it destroys social bonds.

In Shakespeare's The Merchant of Venice, the heroine pleads for debt relief by appealing to Christian mercy. In contemporary America, no such mercy exists. Debtor's prisons appear to be on on their way back.