When the recession struck in 2008, consumers in Kentucky and nationwide tried to whittle down their debts. A survey conducted in 2009 by the Consumer Federation of America found that the number of people focusing on debt reduction rose to 44 percent from 38 percent the previous year. The passage of a few years, however, has reversed this trend as more people lean on credit to make purchases. As of the first quarter of 2018, household debt had hit a record high of $13.2 trillion.

Low interest rates have enabled people to manage their debt more effectively. Some borrowing has changed a little since the financial crisis 10 years ago. Auto loans and student loans form the majority of people’s debts and these balances exceed the debt owed on credit cards. Debt for vehicle purchases appears to have gone up because lenders loosened their standards for financing cars.

The Federal Reserve Bank has started edging up interest rates, which will eventually apply pressure on people holding consumer debts. With financial analysts expecting interest rates to be higher in the future, people should focus on reducing debt and saving like they were after the recession of 2008. Ideally, people will save $1 out of every $10 that they spend and pay their credit card balances in full every month.

Unexpected circumstances, like a medical emergency or job loss, could undo the frugal plans of a person. When hardship leaves a person with excessive credit card debt, the advice of an attorney might provide insights about debt relief. An attorney may be able to negotiate a new payment plan with some creditors or recommend filing for bankruptcy. The assistance of an attorney when approaching a bankruptcy court may allow a person to disclose financial records accurately and achieve a discharge of some debts.