Credit cards and loans have added to the debt crisis

Delegates at a conference in Edinburgh on Wednesday were hearing warnings that many households are "just a couple of pay packets away" from not being able to deal with their debts.

Last year, Citizens Advice Scotland dealt with debt totalling more than �90m. It is the single biggest headache dealt with by the organisation, which handled 40,000 new enquiries.

Spokesman for Citizens Advice Scotland Ian Brown admitted: "We are being swamped. It's a major concern.

"We are all borrowing more against a backdrop of low interest rates, low inflation, low unemployment and rising house prices - so it's leading up to a feel good factor.

"This is a deceptively golden era and we might be lulled into a fool's paradise."

The reality is that many households are only a couple of pay packets away from their loan or credit turning into an unmanageable debt Martin Barnes Child Poverty Action

But with borrowing at record levels there are few signs that the debt burden will decrease, insists director of the Child Poverty Action Group Martin Barnes.

He said: "The possible consequences for individuals and the economy should not be dismissed as siren voices or doom merchants.

"It is naive to believe that the economic cycle has been abolished - a relatively small rise in unemployment could significantly undermine consumer confidence with potentially serious consequences for the economy.

"The reality is that many households are only a couple of pay packets away from their loan or credit turning into an unmanageable debt."

Warnings have been issued, too, that a relatively small rise in unemployment could significantly undermine consumer confidence and damage the economy.