Although people taking out unsecured loans have not secured the debt against their property or possessions, one expert has warned some lenders may look to recoup their losses through the courts.
Chris Tapp, director of Credit Action, said lenders may choose to recover unpaid debt through county court judgments and bailiffs.
"In this country lenders will try to recoup their money by seizing property as opposed to forced imprisonment," Mr Tapp explained.
Lenders will look to "get back as much as possible" through either removing a service or seizing goods or repossessing property, he added.
However, taking out a debt consolidation loan may be one solution for managing mounting debts, according to James Jones, consumer education manager at Experian.
The expert says this type of loan is "one of a range of options" for people in debt.
Borrowers should "always" discuss the issue with their lenders if they are experiencing difficulty making repayments, he advises.
