Rising energy bills could be the "final straw" for mortgage holders who are already finding it hard to meet their monthly repayments, it has been claimed.

According to the Mirror, it is crucial that homeowners budget to help them meet their mortgage repayments and avoid repossession.

Other options include lengthening the term of repayment to lower the monthly cost or even switching to an interest-only mortgage.

However, this tactic will only work if the householder has another way of saving the money to buy their house at the end of the contract, the newspaper added.

According to homelessness charity Shelter, struggling homeowners who face the threat of repossession should seek advice on their situation as soon as they can.

It advises: "An adviser may be able to help you to negotiate and avoid the time and expense of going to court.

"It’s often possible to prevent arrears or disagreements from leading to repossession."

Credit card companies are losing income because an increasing number of Britons are turning to remortgaging their homes as they seek to regain control of their finances, it has been reported.

According to the Independent, many debtors used the "large chunks" of equity in their homes to consolidate their borrowing into a more manageable amount.

This has led to many cutting back their credit card spending, it claimed.

Datamonitor analyst Kieran Hines told the newspaper: "Some consumers are unwilling to use credit cards because of a perception that they will get into more debt."

Other factors influencing the income of credit card providers include a rise in bad debt and an increase in competition.

Last year, Picture Finance called on Britons to take a more "proactive approach" to cutting the cost of their credit.

Its marketing director Julia Dallimore said consolidating credit into a more favourable rate is a good way to "significantly" reduce monthly repayments.

Millions of Britons are about to realise that their take-home pay is not sufficient to cover their debts, a new report has claimed.

A study by accountancy firm KPMG has revealed more than 20 per cent of debt-ridden adults already find it hard to manage their money, the Daily Telegraph reports.

It discovered that 35 per cent have concerns that they will find their repayments even more difficult to meet in a year.

The research was undertaken on behalf of ITV’s new documentary Repossession, Repossession, Repossession.

Steve Treharne, a partner at KPMG specialising in insolvency, told the newspaper many people will find 2008 a financially unsettling year.

"A lot of people have been living the life of Riley on credit … This is all going to have to stop. It is unsustainable," he asserted.

Many people will already have been worrying about the cost of servicing their debt obligations as the rising cost of fuel and food squeezes their household income.

One option for struggling debtors is an individual voluntary arrangement, usually called an IVA.

These allow borrowers to repay an affordable sum for a fixed period, at the end of which any remaining debt is written off.

A couple have spoken of their distress when their "dream home" was repossessed because of their debt.

Mark and Diane Bouncer told the Express and Star that they had generated more than £140,000 worth of debt as they struggled to repay their mortgage.

They described their "stress and trauma" as they left their home.

"All the years of struggling and, thinking back, trying to buy the house in the first place was all for nothing," Mr Bouncer told the local news resource.

Late last year, charity Citizens Advice warned that subprime mortgage lending has driven the increase in mortgage arrears and court actions.

It accused "irresponsible lenders" of encouraging low-income earners into unaffordable debt which lead to financial issues and homelessness.

Struggling debtors may want to consider an individual voluntary arrangement (IVA) if they find they cannot afford to service their debt and their mortgage.

IVAs allow borrowers to retain important assets such as their homes.

Repossession rates are rocketing around the country, a local charity has warned.

An increasing number of people are finding themselves with an unmanageable debt burden and for many people the end result is the loss of their home, according to Martin Broad, manager of Bournemouth Citizens Advice Bureau.

Thousands of consumers enter individual voluntary arrangements in an effort to clear their debts and Mr Broad told the Dorset Daily Echo that debt issues are not always the result of irresponsible borrowing.

He continued: "We’re seeing more problems with debt than anything else from people from all ages and backgrounds.

"Repossession has huge knock-on implications for the whole of society."

Mr Broad went on to suggest that many of the debt-related problems for British homeowners stem from the increases in the base rate of interest introduced by the Bank of England in recent years.

Last year, Citizens Advice claimed that the subprime mortgage sector has undermined homeownership for thousands of people around the country.

Manchester has the highest concentration of debt stress in the UK, according to recent research.

Figures from credit reference agency Experian show that almost 29 per cent of households across the city are dealing high or very high levels of debt-related stress and for some consumers the problems have become so severe they have contemplated suicide.

An ITV program this week will highlight the plight of some of the country’s most seriously indebted consumers, including 23-year-old ambulance worker James Masterman who is convinced his arrears will take decades to pay off.

Mr Masterman told the Manchester Evening News: "It was like, ‘well, what’s the point anymore? I can’t afford to keep on going, I can’t afford what I’m doing. I can’t afford to live’."

Individual voluntary arrangements, also known as IVAs, offer a way out of debt for thousands of people each year in the UK.

The latest figures from YouGov suggest that there are currently close to eight million Britons in serious debt trouble.

Debt is a massive issue for people across the UK, according to Rachel Lacey, editor of personal finance publication Moneywise.

Ms Lacey has suggested that for many British consumers debt-related problems arise as a result of their lack of understanding of how personal finance products work.

With this in mind, the Moneywise editor has insisted that children in schools around the country should be taught the basics of how to effectively manage their personal finances and stand a better chance of avoiding serious debts.

Issues such as how best to use credit cards in a such a way that debt levels remain manageable ought to be part addressed in the UK’s classrooms, Ms Lacey went on to claim.

"These problems aren’t going away, so what we’d like to see is personal finance being taught in every school as a core part of the national curriculum," she said.

Figures released by the Credit Action charity recently have shown that the average household in the UK currently pays around £3,800 in interest repayments on an annual basis.

Bankruptcies in Wales have doubled in the past six years, as well as an increase in debt counselling queries, reports the BBC.

Those facing problems with debt in Wales can seek help from the Welsh Centre for Credit Counselling, a service which dealt with 6,000 inquiries in 2007.

Dr Brian Gibbons, Wales’ social justice minister, explained to the BBC what action was being taken by the government and the importance of seeking debt help from a legitimate source.

"We are taking action with the UK government on rogue lenders and people who are operating outside the system, loan sharks and so forth," said Dr Gibbons.

Citizens Advice has reported a 30 per cent increase in the numbers seeking information on bankruptcy.

Figures released by uSwitch.com shows that 4.8 million UK adults spend more than they earn, resulting in debt and a 33 per cent increase in bankruptcies from 1992, highlighting the importance of seeking debt advice and assistance.

Although there has been a one per cent decrease in bankruptcies, there is still a "rough ride" ahead for those with debt issues, according to Grant Thornton.

Figures released by the Insolvency Service for the fourth quarter of 2007 also showed a decrease in individual voluntary arrangements (IVAs), which were down 8.2 per cent to 9,188.

Head of personal insolvency at Grant Thornton Mike Gerrard commented on the figures, suggesting that many in debt are simply not seeking help, whilst others had their IVA application rejected.

Mr Gerrard said: "People are being squeezed for their money and while some take on unmanageable debt needlessly – a greater majority are doing so to keep themselves afloat."

He added that the uptake of IVAs was likely to increase in 2008, as a new code will "make the IVA process more transparent".

Figures from Credit Action reveal that interest repayments in Britain are now at a record level, with £94.6 billion paid in 2007.

The current financial climate could mean that cheaper credit sources are "going to be harder to get your hands on," according to Moneywise magazine.

Editor of the magazine Rachel Lacey explained that those looking to extend their credit agreements could be refused an extension because of the tightened market, resulting in a heavier dependence on overdrafts.

Ms Lacey said: "I actually think that in the short term there’s a real danger that people could just take on more expensive debts as an alternative."

She added that credit problems could result in transactions being bounced, resulting in bank charges of around £30 per time, further adding to debt problems.

Research by uSwitch.com shows that although three million UK adults have got a consolidation loan, 65 per cent of those did not close their other credit courses, so creating an average extra £2,300 of debt.