Kentucky

How Kentucky ranks among the states

Kentucky is the 15th most distressed of the 50 states and D.C., and what sets it apart isn’t how much people owe. At the end of 2025, household debt came to $43,160 per person with a credit report here, the 4th lowest of the 50 states and D.C., against $63,200 nationwide (Federal Reserve Bank of New York). What stands out is how often debts end up in court or with a collector. Kentucky had the 6th highest bankruptcy rate in the country in 2025 (see bankruptcy), and its share of people with a debt in collections in early 2025 was tied for 7th highest (see behind on bills). Late payments on loans run only a little above the national rate.

Kentucky ranked among the 10 most distressed states every quarter from late 2021 to early 2025

Poorest and most distressed counties in Kentucky

McCreary County, on the Tennessee line, is Kentucky’s poorest county: 36.4% of its residents lived in poverty in 2024, the highest rate of the state’s 120 counties (Census Bureau, Small Area Income and Poverty Estimates). Knox County, in the southeast, is the most distressed in the state on our County Distress Index, which measures how strained household finances are in every U.S. county. McCreary is just behind it; both score 99. In all, nine Kentucky counties are among the 100 most distressed of the 3,144 counties we score, led by Knox at 18th (the national list). Oldham County, outside Louisville, is the least distressed in the state.

Every county, by score

About two in five Kentucky counties, 49 of 120, score 80 or more, and together they hold 25.0% of the state’s people. The five least distressed, all under 30, sit around Louisville, Lexington and Northern Kentucky.

All 120 Kentucky counties, ranked →

Is Kentucky a poor state?

Yes, by both of the Census Bureau’s main yardsticks. In 2024, 15.4% of Kentuckians lived below the poverty line, the 6th highest rate of the 50 states and D.C., against 12.1% nationwide. The typical household earned $64,481, the 5th lowest, against $81,604 (U.S. Census Bureau, Small Area Income and Poverty Estimates). Income per person, counting all the income residents receive, was $58,256, also the 5th lowest, against $73,204 (U.S. Bureau of Economic Analysis).

Kentucky’s bankruptcy rate is among the highest in the country

Kentuckians filed 12,129 bankruptcy cases in 2025, 264.3 for every 100,000 residents (2024 population). That was the 6th highest rate of the 50 states and D.C., about 1.6 times the U.S. rate of 167.1 (Administrative Office of the U.S. Courts). Kentucky has ranked among the eight highest in every year we have a rate for, 2018 and 2021 through 2025. Filings rose 9.4% from 2024, less than the nation’s 11.1% rise, to the most since 2019, when Kentuckians filed 15,422.

Why are bankruptcies so common here? One possibility

One study offers a possible reason, though it says nothing about Kentucky in particular. Lars Lefgren and Frank McIntyre, economists at Brigham Young University, studied state bankruptcy rates in 1999 and 2000. Two factors explained more than half the differences: how easily creditors could garnish wages and how many filers used Chapter 13. Chapter 13 sets up a repayment plan. The researchers noted that most Chapter 13 filers can’t keep up with the plan, and their cases are dismissed. Many file again, so the same debts get counted more than once (Brigham Young University, June 21, 2009). Kentucky’s Chapter 13 share is high: 45.3% of 2025 filings, the 9th highest of the 50 states and D.C., against 35.9% nationwide, and up from 15.6% in 2001 (our calculation from the courts’ counts). But the study’s data is more than 25 years old, and debts in collections, which never reach a court, run high here too (see behind on bills).

Kentucky’s cost of living: some of the lowest rents in the U.S.

Rent is cheap here by national standards. Kentucky’s median rent was $967 a month from 2020 to 2024, the 6th lowest of the 50 states and D.C., against $1,413 for the U.S. (U.S. Census Bureau). Incomes are low too, but rent still takes a smaller bite: twelve months of the median rent come to 18.0% of the typical household’s income, against 20.8% nationwide (our calculation). We don’t track prices for groceries, gas or power, so we can’t rank Kentucky’s overall cost of living.

Kentucky’s economy: unemployment runs above the U.S. rate

Kentucky’s unemployment rate was 4.7% in August 2026, tied for 9th highest among the 50 states and D.C., against 4.1% for the nation, though the U.S. Bureau of Labor Statistics’ August report doesn’t count that gap as statistically significant. A year earlier it was 4.5%. The rate eased to 4.2% in February and March 2026, below the nation’s, then rose to its August level by June.

Unemployment claims are filed through the Kentucky Career Center. Questions about the state minimum wage go to the Kentucky Education and Labor Cabinet.

What changed in Kentucky in the past year

1. Oct. 1, 2026

   Some immigrants were set to lose full Medicaid coverage

   Under the 2025 federal budget law, refugees, people granted asylum and several other groups of immigrants were set to stop qualifying for full Medicaid in Kentucky on Oct. 1, 2026, according to the state’s Department for Medicaid Services; emergency Medicaid stays available to them. A work rule for some adults on Medicaid comes next (see what to watch).

   Kentucky Department for Medicaid Services, Medicaid Advisory Committee slides, June 4, 2026

2. Sept. 1, 2026

   Federal disaster aid for two storms covers public costs only

   The Federal Emergency Management Agency (FEMA) approved a major disaster declaration for the storms, flooding and landslides of June 26 to 30, covering public repair and cleanup costs in 20 counties, among them Owsley, Madison and Hardin. In May, it had approved one for the January winter storm, in 21 counties including McCreary, Clay and Lee. Neither declaration includes FEMA aid paid to households.

   FEMA, disaster 4937, Sept. 1, 2026; FEMA, disaster 4913, May 29, 2026

3. Feb. 28, 2026

   Regulators approve higher Kentucky Power bills in eastern Kentucky

   The Kentucky Public Service Commission let Kentucky Power raise the average home bill by $10.76 a month in the first year, about 5.87%, to $194.13 for a home using 1,208 kilowatt-hours; the company had asked for $27.30 more a month. Kentucky Power serves about 162,511 customers in all or parts of 20 eastern counties, eight of them among the 20 most distressed Kentucky counties on our County Distress Index. The commission’s chair, Angie Hatton, said rates were a sharper issue for this company than most, “due in large part to a loss of population, about 12,000 fewer residential customers over the past 14 years,” and a drop in industrial use.

   Kentucky Public Service Commission, Feb. 28, 2026

4. Feb. 16, 2026

   Higher rates for Kentucky Utilities and LG&E customers

   The commission approved higher rates for Kentucky Utilities and for Louisville Gas and Electric (LG&E). The approved rates raise the average Kentucky Utilities home bill $8.73 a month, or 6.54%; the average LG&E electric bill $5.14, or 4.73%; and the average LG&E gas bill about $8.27, or 11.09%. The commission turned down a proposed sharing mechanism that would have moved bills up or down to keep the companies’ returns within a set range.

   Kentucky Public Service Commission, Feb. 16, 2026

5. Feb. 9, 2026

   SNAP’s work rule reaches every county, then five are exempted

   On Nov. 1, 2025, SNAP’s work rule for adults 18 to 64 with no disability and no children under 14 took effect in all 120 counties, the Kentucky Cabinet for Health and Family Services says. On Feb. 9, 2026, the U.S. Department of Agriculture approved the state’s request to exempt Elliott, Lewis, Magoffin, Martin and Wolfe counties from Dec. 1, 2025, through Nov. 30, 2026 (see SNAP).

   Kentucky Cabinet for Health and Family Services, SNAP; U.S. Department of Agriculture, Food and Nutrition Administration, letter to the Department for Community Based Services, Feb. 9, 2026

6. Nov. 15, 2025

   November SNAP benefits arrive late after the shutdown

   SNAP benefits were suspended on Nov. 1 during the federal government shutdown. A federal judge had ruled on Oct. 31 that funding be partly restored, and Kentucky processed partial benefits on Nov. 6. On Nov. 15, the governor’s office said full benefits had been processed and should reach cards that day. Gov. Andy Beshear also directed $5 million from the state’s budget reserve trust fund to Feeding Kentucky food banks, and more than $12 million in state money during November to temporarily support the federal Temporary Assistance for Needy Families program.

   Office of the Governor, Nov. 15, 2025

Are Kentuckians behind on their bills?

A somewhat larger share than nationwide is behind on loans, and a much larger share has a debt in collections. In early 2025, 19.0% of Kentuckians with a credit record had a debt 90 or more days late, 16th highest among the 50 states and D.C. The national share was 17.2%. The share with a debt in collections was 17.4%, against 13.2% nationally (Federal Reserve Bank of Philadelphia). We calculated the national figures as population-weighted averages of the states. These are debts people owe, not the state government’s.

A debt in collections is far more common in Kentucky than nationwide; being behind on a card, car loan or mortgage is only a little more common

Kentucky and U.S. shares, first quarter of 2025: people with any debt in collections, and borrowers at least 90 days late on a credit card, car loan or mortgage.

Debt in collections

Kentucky 17.4% U.S. 13.2%

Credit cards, 90+ days late

Kentucky 14.9% U.S. 13.5%

Car loans, 90+ days late

Kentucky 9.2% U.S. 8.5%

Mortgages, 90+ days late

Kentucky 1.3% U.S. 1.2%

Kentucky’s rank among the 50 states and D.C.: collections tied for 7th highest, cards 14th highest, car loans tied for 18th highest, mortgages tied for 14th highest. The U.S. bars weight each state by its population (our calculation).

A smaller share of Kentuckians has a debt in collections than at the end of 2019, when it was 27.5%, but what goes on credit reports changed in between. In 2022, the three big credit bureaus began removing many medical debts from reports. Nationwide, the share of people with a medical debt in collections fell from 14% in March 2022 to 5% in June 2023 (Consumer Financial Protection Bureau). Kentucky’s share had been drifting down before that; its sharpest one-quarter drop came in spring 2023, from 21.6% to 16.5%.

SNAP in Kentucky: fewer people than a year ago, but a smaller drop than most states

In June 2026, 556,517 Kentuckians got SNAP food benefits, once called food stamps: 12.1% of residents (2024 population), the 13th highest share among the 50 states and D.C., against 10.7% nationwide (U.S. Department of Agriculture). That was 6.3% fewer people than the 593,934 of June 2025, a smaller drop than in most of the country: 42 of the 50 states and D.C. had larger ones.

The count was 598,629 in October 2025, then fell every month from November to April 2026, when it reached 555,176, and edged up in May and June (U.S. Department of Agriculture).

SNAP’s work rule now covers every county but five

The Kentucky Cabinet for Health and Family Services says SNAP’s work rule took effect in all 120 counties on Nov. 1, 2025. Adults 18 to 64 with no disability and no children under 14 must work or train an average of at least 20 hours a week. Otherwise, they can get SNAP for only three months in three years. The count fell by 27,593 from October 2025 to January 2026. No source we read splits the drop by cause.

Five counties are exempt from the time limit through Nov. 30, 2026: Elliott, Lewis, Magoffin, Martin and Wolfe. USDA granted the exemption because of their high unemployment, and in August 2026 they had the five highest jobless rates in the state (see the county table).

Fewer people on SNAP doesn’t mean fewer people in need. In 2024, 15.4% of Kentuckians lived below the poverty line, more than the 12.1% share getting SNAP in June 2026 (Census Bureau; U.S. Department of Agriculture).

Apply for SNAP through kynect, Kentucky’s benefits site →

How foreclosure works in Kentucky

Every home foreclosure in Kentucky goes through a court. The lender sues in circuit court, and you have 20 days after you’re served to file an answer. If the court rules for the lender, it orders the home sold and refers the case to a master commissioner, an officer of the court. The sale must be held within 90 days of that order, though the judge can add up to 30 days (Kentucky Supreme Court order 2025-48).

State law lets the court order the sale without first giving you time to pay what you owe (KRS 426.005). If the home sells for less than two-thirds of its appraised value, you can buy it back within six months by paying the price plus 10% a year in interest and the buyer’s upkeep costs (KRS 426.530). The judgment can also make you personally liable for any balance left after the sale (KRS 426.005). A federal rule generally keeps a mortgage company from starting a foreclosure before the loan is more than 120 days past due.

The state received an $85.5 million award from the federal Homeowner Assistance Fund. Through early 2026, the fund had helped 4,457 Kentucky households with their housing costs (U.S. Department of the Treasury).

Kentucky mortgage complaints: what homeowners report to the CFPB

Kentucky homeowners and borrowers have sent 2,778 mortgage complaints to the Consumer Financial Protection Bureau since 2012. Trouble during the payment process is the top issue (818); next come loan modifications, collection and foreclosure (514), then loan servicing, payments or escrow (507).

What to watch before the next edition

Nearest first: a federal data release, a SNAP deadline and the start of Medicaid’s work rule.

1. Oct. 20, 2026

   The September jobless rate for every state

   The Bureau of Labor Statistics is scheduled to publish September unemployment rates for the states. Kentucky’s rate has held at 4.7% since June (see jobs and unemployment).

   Bureau of Labor Statistics, State Employment and Unemployment, Sept. 18, 2026

2. Nov. 30, 2026

   The SNAP time-limit exemption ends in five counties

   The exemption for Elliott, Lewis, Magoffin, Martin and Wolfe counties runs through this date unless the U.S. Department of Agriculture approves a new one (see SNAP).

   U.S. Department of Agriculture, Food and Nutrition Administration, Feb. 9, 2026

3. Jan. 1, 2027

   Medicaid’s work rule is set to start for new applicants

   Some adults 19 to 64 who get Medicaid because of their income alone will need to show 80 hours a month of work, job training or community service, or meet another test such as going to school half-time, to get or keep coverage. The rule starts with new applicants on this date and reaches current members at their February 2027 renewals. Coverage for this group will also be reviewed every six months instead of once a year.

   Kentucky Department for Medicaid Services, Medicaid Advisory Committee slides, June 4, 2026

Where Kentucky ranks highest and lowest