More than 100,000 people in England and Wales were unable to pay their debts during the last year; an all-time high.
Official government figures today revealed that 29,804 people were declared insolvent in the last three months of 2006, taking the overall figure for the year to 107,288.
The figures have raised fears that interest rate rises in the second half of last year, followed up by a further increase in January, have aggravated Britons' already precarious borrowing situations.
Insolvencies in the last quarter were up 7.1 per cent against the previous three months and represented a 44.1 per cent increase on the corresponding period in 2005.
The quarterly total was made up of 17,603 bankruptcies and 12,741 individual voluntary arrangements (IVAs).
Speaking ahead of today's statistical release, James Falla, director of debt consultancy Thomas Charles, predicted a "significant peak" in insolvencies for the first quarter of 2007.
"If interest rates continue to rise, we could see those on the edge being penalised, ultimately pushing up insolvency figures and prolonging the debt crisis in the UK," he said.
The government also revealed today that there were 3,194 company liquidations during the last quarter, of which 1,411 were compulsory.
Digg 
Delicious 
Reddit 
StumbleUpon 
Google 
Technorati 
Netvouz