Living with debt has become the norm for many Americans. Consider these 2015 statistics which detail the significant amount of debt that the average U.S. household is carrying:

  • Combined, the average U.S. household is carrying nearly $131,000 in debt
  • Nearly $16,000 of this amount is in credit card debt
  • More than $48,000 is related to student loans
  • Nearly $170,000 is related to home mortgages
Now imagine that you or a loved one suffer a medical emergency or experience a job loss. How would you pay your mortgage? What about your credit card bills?

The truth is that millions of people across the U.S. are living paycheck to paycheck and for these individuals and families high credit card interest rates, rising healthcare costs and stagnant wage growth are all contributing to a precarious financial situation.

For Kentucky residents who are struggling with unmanageable amounts of debt, it's important to learn about and explore your debt resolution options. An attorney who handles bankruptcy matters can assess your situation and help determine if filing for Chapter 7 or 13 bankruptcy is the best solution for your debt problems.

If you plan to file for bankruptcy, here are four things not to do:

  1. Don't go on a spending spree - While some reliance on credit cards for necessities may be unavoidable, debt related to frivolous purchases won't be discharged in bankruptcy.
  2. Don't pay off debt - It's important to continue to make payments towards your debt, it's also, however, important not to pay more towards any particular debt as doing so may be perceived by the bankruptcy court as providing preferential treatment towards a specific creditor.
  3. Don't hold out on creditors - If you are planning to file or recently filed for bankruptcy, it's important to alert any and all creditors who may otherwise attempt to take legal action against you, garnish your wages or seize your assets - all of which create unnecessary stress in your life and complicate a bankruptcy case.
  4. Don't touch your retirement accounts - In many cases, you are allowed to retain retirement assets in bankruptcy so it's important not to withdraw assets from these accounts in an attempt to pay down debt.
The bankruptcy process is complex with various rules that must be followed, deadlines that must be met and requirements which must be fulfilled. It's wise, therefore, to consult with a bankruptcy attorney who can explain and guide you through every step of the process.