The recession that many experts believe is in the making in the US is the result of millions of consumer taking on more personal debt than they can cope with, according to one expert.
Neil Smyth from the Taylor Wessing law firm told Creditman recently that subprime mortgage lending and excessive credit card debt is the cause of the problems the US economy is currently facing.
And Mr Smyth has suggested that many of the concerns faced by people in America are reflected in the UK, where debt management issues continue to plague consumers.
He said: “All the ingredients that have forced the US economy to the brink of recession are also prevalent in the UK.”
“Even before this week’s market slump, lenders within the UK subprime market that were used to taking on high-risk debt,” he added.
Accountancy firm KPMG predicted recently that as many as 10,000 people in the UK will enter insolvency by way of a debt solution every month of this year.