According to Nick O'Reilly, vice president of R3 - the Association of Business Recovery Professionals, the amount of money borrowed by the public via personal loans, overdrafts, store cards and other forms of credit has seen marked growth since the turn of the century, which in turn has driven how much Britons are in the red. Consequently, Mr O'Reilly asserted that as the level of money owed to creditors has risen over the last few years, more consumers are beginning to develop difficulties in making loan repayments.

However, he suggested that loans and other forms of personal credit have helped to drive the British economy during the past four to five years as they may have allowed members of the public to make purchases that they may not have been able to do otherwise. "The main boom in the economy has been fuelled by personal consumer spending," Mr O'Reilly commented.

The R3 vice president also said: "Naturally, if the level of consumer borrowing goes up, there's going to be an element of it that's going to fall over and not be repaid - and that's what we're seeing now. Now that the level of borrowing is so much bigger in terms of trillions, the level of people with debt problems is obviously higher than it used to be".

In addition, he claimed that it has become evermore easy for consumers to apply for a loan in recent times. Announcing that the financial service market has become "much more competitive" in recent times, the business recovery expert reported that prospective applicants have in general had more success in getting a quick loan, which in turn has seen the financial checks carried out on borrowers become "less rigorous than they used to be". Mr O'Reilly also reported: "So people who perhaps in the past would have been on the border in terms of getting credit, are now easily able to obtain credit cards."

Consequently, he reported that the rise in debt difficulties among those who are struggling to pay back loans and other forms of borrowing has seen many people consider filing for insolvency, either through bankruptcy or taking out an individual voluntary arrangement (IVA).

However, Chris Tapp, deputy director of Credit Action, recently advised that those with unmanageable proportions of debt should take the time to consider their financial options. The director stated that in choosing insolvency, their credit history is likely to be damaged severely. And with the effects of bankruptcy hanging over their head for six years, Mr Tapp advised that opting for this tactic could make getting a loan "much harder" for consumers in the future, in addition to having an impact on their access to employment.

As a result, opting for a debt consolidation loan could be a much more effective option for those struggling with their money management, as by consolidating their previous debts into one monthly payment they could be left with more disposable income at the end of each month. In doing so, such consumers may find that their access to competitively-priced borrowing in the future is not curtailed as it may be should they opt for bankruptcy or an IVA.