When it comes to personal finances, Illinois residents have something to be thankful for: They don't live in one of the top 10 states where residents have the most debt. California heads that list.
Nationally, only about 52 percent of Americans have emergency savings account balances that are higher than their credit card balances. About 24 percent have outstanding credit card debt that exceeds their bank account balances. A 2017 Bankrate study found that 39 percent of Americans have no savings at all while 57 percent have less than $1,000 in savings. The average credit card debt per household is $7,136.
Having more credit card debt than money in the bank is not an enviable position to be in. Savings provide a cushion in case of an emergency so that people do not have to go into more debt.
People who want to have more savings than debt can do so if they work at it. The first step is to create a budget. This allows them to determine how much money is coming in as well as how much is going out. By studying this, people can determine where they can cut expenses to save money for a rainy day. Some individuals might want to consider a second job or switching to a higher-paying primary job.
If these measures don't work, perhaps because the person encounters a job loss or major medical expenses, the overwhelmed consumer may need to consider personal bankruptcy. The debtor may want to consult a bankruptcy attorney to explain their options, such as whether Chapter 7 or Chapter 13 bankruptcy better fits their financial situation, and how the process works. An attorney may also be able to explain how to stop home foreclosure and repossession.