That's bad, but it's not really a spiral if you do things like keep a job and make sure that your monthly payments for everything are lower than your income each month. The problem with a lot of these loans is that they're structured to almost never pay off the principle of the loan, and the interest keeps compounding.

The really bad legal examples IMO are student loans - they're huge loans that even if you get your degree you're not likely to be able to afford a payment that would pay them off in a reasonable time, and so that's why you end up with stories like "I borrowed $30,000 to go to college, and after 10 years of $500/month payments, I now only owe $47,000" (I'm making up numbers for the quote but real examples exist for this)