Ann Pettifor, executive director of Advocacy International, claims that people are too complacent about job security to realise that if there is a change in personal circumstances, they could risk bankruptcy.
“We pay our debts through our incomes; it’s when we lose our jobs or when our wages fall that actually the crisis hits,” said Ms Pettifor on BBC Radio 4’s Today programme.
“And when people go bankrupt it’s because they don’t have enough money.”
Her comments were made following the publication of Datamonitor’s report which showed that a third of western European debt is owed by Britons.
Ms Pettifor bases her claims of a debt bubble on what is happening in the United States, where people are struggling to make repayments from their incomes and are losing their homes.
With Britons facing rising council tax and energy bills, Ms Pettifor’s warning could soon become true unless many take advice on becoming debt free.