NEW YORK -- As the bills from holiday spending sprees arrive, Americans are finding that the mountain of debt they've built has gotten even higher.

Consumer debt has more than doubled in the past 10 years, to record levels, making it hard for many families to cope.

For Bruce and Lorraine Esbensen of Clifton Heights, Pa., trouble started when they spent lavishly on their wedding six years ago. They soon found themselves falling behind on their bills.

"Creditors were calling, and I knew if I paid one, I couldn't pay the other," Lorraine Esbensen remembers. "It was so painful I got to the point where I didn't want to answer the phone."

Credit counselors helped the couple work out a repayment plan, but it still took more than four years to pay down their debt.

"We still basically live paycheck to paycheck," she said. "But we do have an [Individual Retirement Account] going now and we're careful with our spending, so we feel better."

Consumer debt hit a record $1.98 trillion in October 2003, according to the most recent figures from the Federal Reserve. That debt - which includes credit cards and car loans, but not mortgages - translates to $18,700 per U.S. household.

At the same time, the government says the nation's savings rate dropped to just 2 percent of after-tax income in the first half of the year. That means many people lack the means to deal with financial emergencies, much less their eventual retirement.

Experts worry about the impact not only on individual families, but also on society as a whole.

"The Depression generation is passing on, and we're losing their values," said Howard Dvorkin, president of the nonprofit Consolidated Credit Counseling Services in Fort Lauderdale, Fla.

"Now we've got an entire generation that doesn't know anything about thrift and careful spending. It's tearing the fabric that made this country great."

Just how did American consumers get so deeply in debt?

Robert D. Manning, a sociology professor at the Rochester Institute of Technology who wrote "Credit Card Nation - The Consequences of America's Addiction to Credit," says the problem dates from the 1980s, when financial institutions began issuing credit cards and making loans to people who wouldn't have qualified in the past.

"At the same time, people had this sense of entitlement based on the idea that this generation was expected to outperform the earlier generation," Manning said. "It was OK to buy yourself a better standard of living than your parents, and the banks would help you do it."

The nation's credit card debt currently stands at $735 billion, or nearly $7,000 per household. And because about 40 percent of card users pay their balances in full each month, the household card debt of those who carry balances is closer to $12,000.

Americans have become champion shoppers, says Joel Greenberg, chief executive of the nonprofit Novadebt credit counseling service in Freehold, N.J.

"Through the go-go '90s, the irrational exuberance wasn't just in the stock markets," Greenberg said. "It was throughout society. We became phenomenal consumers - and deplorable savers."

Shopping is what Kristeen Mahler, a secretary from East Meadow, N.Y., turned to for solace after the Sept. 11, 2001 terror attacks. Mahler's office was just 100 yards from the World Trade Center.

"I shopped to try to forget it," she said.

She bought clothes for herself, gifts for friends - and kept the mounting bills a secret even from her husband.

Mahler said she finally started talking about the attack and found support from family and friends in dealing with her anxiety.

She also sought credit counseling, and is one year into a four-year plan to pay off her debts.

What's surprising about the nation's debt is that it has continued to rise despite record numbers of mortgage refinancing from 2001 to 2003, many of them yielding cash that consumers have used to pay down credit card balances.

Mark Zandi, chief economist at Economy.com, points out that the rate of growth of card debt has slowed "because people are using their homes as cash machines."

But although refinancings have allowed upper-income households to put their balance sheets in order, lower-income families without that option are finding it harder to cope, he said.

"They're the folks filing for bankruptcy in record numbers. They're the ones facing repossession and foreclosures," Zandi said.

Consumer bankruptcies have exceeded 1 million a year since 1996, hitting a record of 1.54 million in 2002.

Bankruptcy filings totaled 1.25 million during the first nine months of 2003, and could set a new record when full-year tabulations are done by the Washington-based American Bankruptcy Institute.

There's debate about how the high debt levels and demanding repayment schedules will affect the economy.

Americans currently spend a near-record 18.1 percent of their after-tax income to cover debts, including mortgages.

That limits their ability to borrow more to spend more, and consumer spending accounts for about two-thirds of the economy.

Federal Reserve Chairman Alan Greenspan has pointed out that because of low interest rates, consumers can more easily handle their debt so the level is "not a significant cause for concern."

Economist Sung Won Sohn of Wells Fargo & Co. agrees that for now, most Americans are OK and should continue to be the driving force in the nation's economic growth.

Still, he said, the level of debt does raise concerns.

"In the long run, it's a ticking time bomb," Sohn said. "At some point when you get a sharp setback in the economy or a spike in interest rates, the high debt causes instability."

This story ran on Associated Press on January 6, 2004.