Study Says Kentucky is Among States with the Most People in Financial Distress

What Is Financial Distress, Really?

What does it mean to be in financial distress? I couldn’t give you a definition, but I feel I could fall into that category. For me, it’s a “I know it when I see it” type of term.

Well, that just won’t do, especially if you’re going to conduct a study that ranks the states with the most (and least) people in financial distress – and that’s exactly what WalletHub has done. The financial website defines it as “having a credit account that is in forbearance or has its payments deferred, meaning the account holder is temporarily allowed to not make payments due to financial difficulty.”

How This Study Measured Financial Distress

The study analyzed nine metrics across six categories – everything from average credit scores and bankruptcy filings to the prevalence of accounts in forbearance and online searches for terms like "debt" and "loans."

Kentucky’s Financial Standing

The numbers have all been sufficiently crunched, and the results are not great for Kentucky, which earned a 9th-place ranking.

• The two categories Kentucky struggled the most with are People with Accounts in Distress and Average Number of Accounts in Distress. Kentucky ranked 3^rd highest in both.
• Kentucky had some decent scores in other categories, though – 39^th in credit score rank is one example.

ALSO READ: Apparently, These are the Safest Cities in Kentucky for 2025

What Kentucky Residents Should Know

If you live in Kentucky – or any state near the top of this list – here are some things you might want to consider:

• Watch your credit: Being in forbearance or missing payments can drag down your credit score and lead to higher interest rates later on.
• Plan for setbacks: Emergencies happen—set aside even a small emergency fund if you can, to help buffer against life's curveballs.
• Use community resources: Credit counseling services, debt negotiation programs, and utility assistance all exist to help when you're strained.

Sometimes I see these studies and think, “What’s the point?” Is it just to make some states feel bad and others feel good? In reality, I think studies like this are meant to serve as a call to action. Hopefully, residents see the results and decide to do something about it. They aren't just stats – they’re signals that our communities need support, resources, and new strategies to build financial resilience.

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Take a minute (or several) to look over the FULL REPORT here, or get a broader idea of the results by scrolling over the map below.