The debt loads threaten to cost more Americans their houses and drive more consumers into bankruptcy court.
In Tarrant County, Texas, the number of foreclosure notices this month rose 28 percent to 458, compared with April 2000, according to All American Title Service in Fort Worth. And lenders are foreclosing on more expensive homes, said Rhonda Brown, co- owner of All-American, adding a rising number of luxury homes worth US$250,000 or more to the county's monthly auctions.
While courtroom statistics aren't available yet, a private report indicates that personal bankruptcy filings increased 22 percent in the first three months of the year from the first quarter 2000 to more than 356,000, the highest quarterly total since 1994.
Fitch Inc, a bond rating agency used data compiled by Visa International Inc to make the report.
While the Fed's rate decreases could spur enough growth to protect employment, consumers could also become too confident, analysts worry.
"What the Fed is doing is encouraging consumers to take on more debt," said Paul Kasriel, an economist with Northern Trust Corp in Chicago.
"At some point the Fed is going to have to raise rates, and that is going to be the coup de grace for consumers."
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