An expert has accused lenders of "tripping over themselves" to provide credit and failing to adequately check borrowers’ suitability.
Vice president of the Association of Business Recovery Professionals (R3) Nick O’Reilly has said the competitive nature of the financial services market meant checks were "less rigorous".
Those who might have been refused in the past are now finding it easy to secure credit, and the recent boom has been fuelled by an increase in personal spending, he claimed.
"Now that the level of borrowing is so much bigger in terms of trillions, the level of people with debt problems is obviously higher than it used to be," he stated.
Figures released by the government show there were nearly 27,000 individual insolvencies throughout England and Wales in the second quarter of 2007.
Although that was a decrease on the previous quarter, it was a 4.2 per cent increase on the same period in 2006.