Personal bankruptcies rose 22.2 per cent in the final quarter of 2008 to 19,100.

There were also 29,444 individual insolvencies in England and Wales in the fourth quarter of 2008 – a rise of 18.5 per cent on the previous year, data for the from the Insolvency Service show.

In total, individual insolvencies rose 18.5 per cent – as the UK entered recession and financial problems grew too much for thousands.

Perhaps more worryingly for the economy as a whole, the number of firms facing liquidation rose 51.6 per cent.

Alan Tomlinson, at insolvency practitioners Tomlinsons, said: “The appalling economic conditions are claiming more and more victims, as companies in all sectors make redundancies or simply fail.

“Since the first week of January, the number of people in financial difficulty seeking advice from us has increased significantly.

“Many are struggling with debts or a mortgage that they took on during the good times, and which are now proving insurmountable.”

He added he expected the number of personal insolvencies to continue to rise throughout 2009 and for the numbers to get worse before they get better.

“It’s essential that people take action as soon as possible if they are starting to struggle. The worst thing to do is stick your head in the sand and hope it will go away,” Mr Tomlinson said.

He advised people to seek advice if they were starting to fall behind on mortgage payments, or having to live off credit cards.

Debt warning signs:

• Falling behind with your mortgage
• Increasingly having to live off your credit card just to make ends meet
• Having to take credit from parties that you would not normally take credit from
• Borrowing money from family or friends to pay pressing creditors
• Borrowing from Peter to pay Paul