"Too early" to see effects of credit crunch on debt

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"Too early" to see effects of credit crunch on debt

It is still too early to tell if the credit crunch will impact upon debt levels, according to the Consumer Credit Counselling Service (CCCS).

However, James Ketchell, spokesperson for CCCS, suggested that it is likely those with certain fixed-rate mortgages will be disadvantaged the most.

"There is a risk that people on cheap fixed-rate mortgages will in the future be forced onto more expensive products, so they will have to address their spending as a consequence of that," he explained.

Mr Ketchell remarked that "mortgages and rental payments" are the areas which are most likely be affected in tightened financial situations.

Meanwhile, leisure and luxury items "are always the first thing" that households reduce spending on when facing money problems, he added.

There were a total of 107,288 insolvencies in 2006, according to figures from Thomas Charles.

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