Tennessee residents who went into debt this holiday season were not alone. According to the National Retail Federation, Americans spent an average of over $1,000 each to buy gifts for their friends and family this year. That amount of money isn’t in most people’s bank accounts. Studies claim that 60% of Americans have less than $1,000 saved in the bank.

Without enough money available in savings, many Americans turn to credit cards and personal loans to purchase gifts in December. After credit card balances rise, there is often an increase in delinquencies over the next two months. Some Americans are able to pay off this debt when they receive their tax refund later on. However, that may not be a good solution for everyone.

Some financial gurus suggest the ‘snowball” strategy for debt repayment. This method involves paying off the credit cards that have the highest interest first before tackling the lower interest debts next. Though this may save more money in the long run, some people find that they have more success paying off smaller balances first, regardless of the interest rate. By squashing small balances first, the debtor could get a psychological boost by simply eliminating a monthly bill.

Sometimes, credit card debts become so overwhelming that a person cannot afford to pay them back with their monthly income. When this happens, filing for Chapter 13 bankruptcy may be the best solution. An attorney could help a client look into the various forms of bankruptcy and debt relief to find the best solution for their situation.