The number of people going bust could rise next year, says the accountancy firm PricewaterhouseCoopers (PWC).
It predicts that people will start building up credit card debt again as hard pressed home owners try to cope with higher mortgage interest rates.
And they say a backlog of individual voluntary arrangements (IVAs) could also push up the insolvency figures.
The number of people becoming insolvent has fallen in the past year, while credit card debt has also dropped.
However the annual report from PWC, entitled Precious Plastic, suggests these trends could change.
"There could be a spike in personal insolvencies next year as a result of over-borrowing by consumers," said the report's authors.
"While the trend in individual voluntary arrangements (IVAs) has declined in recent quarters, this is partly due to a hold-up in the processing of IVAs due to ongoing fee discussions between banks and insolvency providers, as well as fairly flat levels of unsecured debt in the past two years".
Credit card debt
Contrary to many expectations, the number of people going bust started to fall this year.
The latest figures from the government's Insolvency Service revealed earlier this month that
As for credit card debt, this has in fact been falling since the beginning of 2006.
A rise in outstanding credit card debt recorded in September was only the first monthly increase for a year.
PWC argues that more than a million people will come off their current fixed-rate mortgage deals in 2008.
As a result, they may face paying a further £140 a month on average, unless they can remortgage at similarly low interest rates as before.
This could lead to some home owners relying more on their credit cards for other spending, leading to credit card debts building up once more.
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