Nearly one in 10 people who rent a home and have unsecured loans owe more than their annual income, according to research by the Bank of England.
It warns that these people are likely to be 'experiencing severe difficulties in servicing their debts'.
Those paying a mortgage on their own home are far less likely to get into trouble, because they can use the equity in their house as a fall back.
But the proportion of renters with unsecured debt continues to rise, the Bank says.
Nearly 15% of renters say their loans are a 'heavy burden' compared with 5% of homeowners.
The Bank notes that the sharp rise in households becoming insolvent means one in four people now know someone who has become bankrupt over the past year.
This makes them more inclined to consider bankruptcy themselves and suggests the number of personal bankruptcies will continue to rise, much to the annoyance of the banking industry.
This weekend, British Bankers Association boss Angela Knight added her voice to the criticism of the marketing tactics employed by insolvency firms.
Source: Daily Mail
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