CREDIT card debts have contributed to a big rise in bankruptcies, it has emerged.
And insolvency experts fear a Christmas spending spree will leave even more people in debt.
Government figures show 9,156 individuals filed for bankruptcy in the third quarter of this year - 4.2% up on the previous quarter and 28.5% higher than the third quarter of 2003.
Some 11,967 people were declared insolvent during the quarter - the highest quarterly figure on record and 31.1% up on a year ago.
Insolvency practitioner Peter Sargent, Huddersfield and Halifax spokesman for the Association of Recovery Professionals, said: "Many of the bankruptcies are a consequence of credit card debt.
"And with Christmas around the corner, we believe we will see yet more rises in bankruptcy levels.
"These days, Christmas is just `spend, spend, spend' and we are concerned that those already struggling with debt will bury their heads in the sand until after the festivities."
Mr Sargent, who heads Sargent & Co in Halifax, said: "It's no coincidence that January is a busy month for insolvency practitioners - picking up the pieces of a Christmas on credit too far."
The figures from the Department of Trade and Industry follow a report showing that home repossession orders now stand at a four-year high.
The debt problem was also highlighted by a recent court case where a judge wiped out £384,000 of loan debts because of a "bad" loan agreement.
Mr Sargent said credit played a vital part in the UK economy, but said not enough consideration was being given to whether people borrowing large sums were even capable of repaying them.
He urged people struggling with debt to contact licensed insolvency practitioners or agencies such as National Debtline, the Citizens' Advice Bureau and the Bankruptcy Advisory Service.
There was better news for businesses - with a fall in corporate insolvencies. The number of companies going into liquidation fell by 5.6% over the quarter and by 12% compared with a year ago.