As the number of homeowners unable to pay their mortgages continues to increase, RKI, a debt collection agency, is warning that the economy is on the verge of an economic calamity.

In 2013 alone, the value of past due debt owed to mortgage lenders has risen 36 percent. RKI called the rise alarming because many homeowners already have high debt levels. 

“The way I see it, we’re looking at a housing bubble,” said Frank Papsø, the head of Nordic division of Experian, the firm that owns RKI.  “A lot of homeowners are struggling to repay loans that their home equity doesn’t cover.”

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Papsø said that with the high debt levels meant that a rise in the interest rate, currently at historically low levels, would likely like to a spike in the number of foreclosures. 

Even though the housing market has begun to right itself in and around major cities, high levels of debt among homeowners in other areas was preventing an overall economic recovery from taking off. 

“Everyone is talking about a recovery,” Papsø said, “but people’s debt isn’t falling, we’re not buying more cars and the amount of money RKI is seeking to collect is 16,6 billion kroner.”

Economists predicted that the downturn in the rural housing market would continue for a number of years.