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UK consumers are shrinking their debt burdens but not by paying off their bills.  They are taking advantage of laws established to help people avoid bankruptcy.

It allows debtors to pay as little as 25% of their monthly bill.  If the creditors that hold 75% of their debt agreed to a debt reduction as well, then the remaining debtors holding the other 25% must follow suit.

So United Kingdoms are reducing their debt through forgiveness.  In the United States the outgoing Republican controlled Congress passed tougher bankruptcy laws just over a year ago.  US consumers are still racking up the debt quickly, but they do not have the UK style of programs to get out of debt.

The real estate market is dropping in multiple areas of the country but not in all, energy prices are still high even though they are off their peaks.  A US consumer backlash against their debt could spell trouble not only for banks but for the economy as well.  If consumers lose spending power from their credit card after a repeal of the bankruptcy legislation, businesses stand to lose as much as the banks might lose.

However, losing a a lot of money to reorganizing consumer debt, might be the lessor of two evils faced with mass defaults by borrowers if the real estate decline gets worse approaching something along the lines of the real estate bust of the early 80's say.  Several industries have been bailed out over recent years from energy to airlines, the US might be confronted with the need for a consumer debt bail out before the decade is out.