The Council of Mortgage Lenders (CML) has predicted the number of property repossessions will increase by 50 per cent next year as overstretched borrowers fall victim to high interest rates and the end of the house price boom.
It has warned it expects the number of repossessions to rise to 45,000 next year compared to an anticipated 30,000 in 2007.
Acting Liberal Democrat leader Vince Cable said: "The government must act now to curb irresponsible lending practices if the economy is to have a soft landing rather than a crash."
For borrowers who are already feeling the strain of high interest rates and who are concerned any further movement in the economy could cause bankruptcy, an alternative could be an individual voluntary arrangement (IVA).
An IVA puts a halt to letters and phone calls from creditors and helps debtors repay their debt at an affordable monthly rate. Unlike bankruptcy, it can help people protect key assets like their family home.