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Efforts to retire credit card debt may not last

For Kentucky residents facing financial challenges, the first advice from family and friends is often to cut back on unnecessary expenses. Consumers across the nation followed this advice by showing fiscal discipline in the first quarter of 2017, according to research. Credit card debt shrank an average of $300 per household. Unfortunately, this decrease may not be breaking a larger trend of rising debt in all categories. The research did not consider the rate of unpaid bills, personal bankruptcy or delinquent debt.

Credit card debt, which has the highest rates and often includes penalties for late or unpaid bills, shrank by nearly 2 percent. Other categories showed slight increases. The $300 drop may not seem like much, considering that total credit debt still averages over $16,000 per household. Such a high level of debt can cause significant problems in cases of sudden unemployment or other financial challenges.

A dip in this form of debt is typical for the first quarter. Consumers often renew their goal to eliminate debt after the holiday season. Unless the goal is pursued over the long term, some of those consumers will have a need for debt relief, such as filing for personal bankruptcy.

Kentucky residents have options to deal with unpaid bills besides losing their home and other possessions to creditors. One of those options is Chapter 7 bankruptcy. Unlike with Chapter 13, Chapter 7 cases may require only a few months to complete. This type of bankruptcy can also protect certain exempt assets. An attorney who focuses on personal bankruptcy cases may explain the eligibility requirements of this particular chapter.

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