As the cost of borrowing rises, it could impact on the British economy, an expert has acknowledged.

Gareth Mackie, a spokesman for high street bank Halifax, warned that people who find themselves in financial difficulties should seek advice and support from their lender or bank.

"It’s not in anyone’s interest for people to get into financial difficulty so don’t leave it until things are in a precarious situation," he added.

However, for some Britons, Mr Mackie’s advice may be too late and their debts through credit cards, loans and other sources of borrowing have become too great for them to cope with.

One possible alternative to bankruptcy in such cases is an individual voluntary arrangement, more commonly called an IVA.

These agreements allow the debtor to repay an affordable monthly sum for a fixed period at the end of which they can be set debt-free.

IVAs can allow people to retain ownership of important assets such as their homes.