DEBT OWING on personal loans, credit cards and telephone and household bills has risen substantially over the course of the year, new figures show.

The level of debt outsourced to credit management company Intrum Justitia Ireland by telecoms companies increased by 572 per cent in July and August of this this year, compared with the same two-month period last year.

The increase in outsourced debt in the telecoms sector has been growing dramatically since March.

The company said the debt outsourced for collection by banks and financial services relating to unsecured lending such as personal and motor loans, and credit cards, rose 271 per cent since June.

However, outsourced debt in the utilities sector, which covers electricity and gas bills, has fallen since June, compared with the second quarter of this year.

Nick Biggam, managing director of Intrum Justitia Ireland, said the figures indicated "a significant acceleration in defaulting accounts through 2008".

He said the latest data from his company showed "things are getting substantially more difficult" as the year progresses.

"This is on the household debt, so bigger issues may emerge on the secured lending side," he said.

Mr Biggam said the figures showed that consumers were being "selective in terms of which accounts they . . . pay when times get difficult".

He said consumers were more likely to pay utility bills first as they were more important, while mobile phones were less essential.

Loan and credit card debt tends to be higher and so has a bigger impact on households, he said.

The main Irish banks reporting their half-year results over the last month reported no significant deterioration in mortgage arrears.

Irish Life Permanent said last week that it had increased its bad debt charge on consumer finance as it anticipated an increase in arrears.