Debt crisis deepening

A survey conducted by the Combined Insurance company has revealed the worrying extent of the debt crisis gripping Britain

12:32 15 August 2005

A survey conducted by the Combined Insurance company has revealed the worrying extent of the debt crisis gripping Britain. More than half of borrowers are so far in debt that they would be forced to default on their credit card and loan payments within three months of losing their job.

In addition, 40 per cent of borrowers would be unable to continue with their mortgage payments were they to lose their job.

According to This is Money, the Citizen's Advice Bureau has also indentified a worrying trend, with the number of borrowers subject to over 100,000 of debt on the up.

The CAB is advising more and more customers to declare themselves bankrupt due to the size of their debts and a spokesperson has predicted that "it's going to get worse before it gets better."

Sue Edwards from the CAB, said: " Our bureaux are seeing more and more cases of bad debt every week - many with huge debts built up from several creditors. Levels of debt over 100,000 are not uncommon any more."

High street banks are also taking precautions against consumers defaulting on their payments, with around 3 billion set aside the cover bad debts.