Could all that easy credit so available in the past come back to haunt us? The Province ran an interesting story talking about this very real debt problem facing Canadians today. If you find that this may hit too close to home, Contact Us, maybe we can help. Our Full Review is the first step in your Debt Free future. Read on.

The very thing that lifted the economy from the depths of the recession - Canadians' passion for owning a home - could also be its undoing, warns the chief economist for RBC Global Asset Management.

Central to Eric Lascelles' concern is that the availability of cheap credit has driven household debt levels to record highs and soon-to-be-rising interest rates will bear a "palpable" impact on individuals as well as the economy.

"The very source of Canada's relative success during the worst of the credit crunch - a banking sector that kept on lending and households that kept on buying - could yet spell its undoing if newly enlarged household debt loads prove too onerous to bear," Lascelles said in a report issued Tuesday.

Once the Bank of Canada raises its key lending rate from the current "astonishingly cheap" one per cent, rising costs of servicing mortgage and other debts will sap consumer spending. Housing prices will fall as lower-tier buyers are forced out of the market by diminished affordability.

The strength that the housing market now provides the economy will morph into an "outright drag" on Canada's overall growth rate, or gross domestic product, Lascelles concludes.

The good news, considering previous stern warnings about the impact of elevated household debt is that "this is unlikely to be an outright recessionary event, nor does it fully compromise the ongoing economic recovery."

Lascelles' research shows that despite the high average levels of household debt measured against income, currently at a record 147 per cent, only a relatively small portion of Canadians appears vulnerable to the most severe impact of rising rates.

Yet while many Canadians' debt levels are manageable, there are hints that household finances for certain groups, including seniors and those with low incomes, are becoming less favourable.