The number of people who are entering into IVAs has reached 13,233, according to the Insolvency Service.
This number represents a jump of 23 per cent on the same period one year ago.
And the Big 4 accountancy firm KPMG has forecast that 2007 will see over 130,000 debtors declaring personal insolvency.
Steve Treharne, head of personal insolvency at KPMG said: "With the two recent increases in interest rates, and a further rise on the cards, the pressure on the over indebted can only likely to increase.
"The latest figures showing a continued rise in the number of home repossessions are a further sign of individuals not coping with their financial affairs."
Because borrowing costs are rising, households are being left with even less money to meet their unsecured debts, resulting in more people being forced into taking "formal steps" to deal with their chronic indebtedness, Mr Treharne added.
Currently, the total UK personal debt stands at £1,318 billion, according to statistics from the debt charity Credit Action.
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