The coming year could see hundreds of thousands of UK consumers suffering a debt "tipping point", a leading debt campaigning charity has told the BBC.

Damon Gibbons, chair of campaign group Debt on our Doorstep, says that just relatively small increases in interest rates - within the range of some economist's forecasts - could spell financial doom for many.

And this, in Mr Gibbons words, could create a damaging "snowball effect" for the whole economy.

"People struggling with their debt repayments put their properties up for sale," he said. "This in turn increases supply and reduces house prices.

"This has a snowball effect - falling prices leads to people who have borrowed against the increased value of their property or buy-to-let investors heading for the exit.

"In turn lenders who have overcommitted, rush to repossess as soon as people get behind with their mortgage re-payments."

But the Bank of England, which sets UK interest rates, sees debt levels as an amber rather than red light scenario.

"The banks has warned on debt but it considers it to be more of a personal tragedy for those involved than having serious wider economic consequences," Howard Archer, UK economist at Global Insight, told BBC News.

In other words, the bank sees a rising tide of repossession and bankruptcy as unfortunate but not a "tipping point".

"It is true, though, that due to over-indebtedness more people will feel the effects if rates just rise a little bit than would have been the case in the past," Mr Archer adds.

http://news.bbc.co.uk