The National Debtline, the government advisory service offering help to people in financial trouble, says that it has been swamped with calls since Christmas.
The service admits that it has had to let two-thirds of calls go unanswered in the last fortnight.
Over 12,000 people have attempted to seek advice since January 3rd, the highest number of calls the service has received since its launch in 1987.
The Citizens Advice Bureau (CAB) and the Consumer Credit Counselling Service (CCCS) have also reported a flood of calls, with CCCS saying it has received “several hundred” more every day than at the same time last year.
The number of people seeking help with their homeowner loans, credit card borrowing and unsecured debts contradicts other indicators of a “soft landing” to the UK’s record personal borrowing.
Figures released by the Bank of England show that consumer borrowing increased by £927 million in November, the lowest increase since 2000.
The number of people defaulting on their debts has boomed however, with 17,562 bankruptcies between July and September of last year, a 46 per cent increase on 2004.
Financial services firm Grant Thornton has predicted that 20,000 people will file for bankruptcy in the first three months of 2006, the highest quarterly figures since personal debt records began 45 years ago.
“More and more people are coming to us to ask whether bankruptcy is an option for them, and in more and more cases our advisers are encouraging them to go down that path,” a CAB spokesman told the Telegraph.
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