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People who fall behind on a bill payment most frequently say they're late because they have other debts to pay off, according to a survey of collection agencies and banks.

Nearly one-third of 260 agencies surveyed last year by Western Union Financial Services Inc. said debtors cited "other financial obligations" when asked why they're late paying bills.Other debts replaced unemployment as the most frequent excuse. In Western Union's last collections survey, conducted in 1992, 53 percent of the agencies reported debtors as saying they couldn't pay their bills because they didn't have a job. Only 27 percent cited unemployment last year.

The shift reflects the improved economy, lower unemployment and freer spending habits by consumers, Western Union said.

Twenty-five percent of consumers said they couldn't pay their bills because they made less money last year, compared with 13 percent who cited lower income in 1992.

Consumers considering bankruptcy have fallen to 7 percent in 1994 from 12 percent, the collection managers said.

The biggest change in the debt collection business has been an emphasis on customer service, bill collectors told Western Union.

Western Union, a subsidiary of First Financial Management Corp., surveyed managers at banks, mortgage companies, consumer finance firms and collection agencies. The margin of error of the survey was plus or minus 5 percent.