The number of people going financially insolvent across England and Wales jumped to a seven-year high in 2018, official figures show.
Some 115,299 people went insolvent during 2018 - marking the third year-on-year increase in a row and the highest annual total since 2011 when 119,943 cases were recorded.
The figures, released by the Insolvency Service, are made up of bankruptcies, which are often seen as a last resort; debt relief orders (DRO), which are aimed at people with lower debts but no realistic prospect of paying them off; and individual voluntary arrangements (IVAs), where money is shared out between creditors.
Of the people who went insolvent last year, 61.6% used an IVA, 24% used a DRO and 14.4% entered bankruptcy.
Meanwhile, the underlying number of company insolvencies increased to 16,090 last year - the highest level since 2014.
The Insolvency Service said the 16.2% year-on-year jump in personal insolvencies was driven by IVA numbers, which reached record levels last year.
There were 71,034 IVAs last year - an increase of 19.9% on 2017 and the highest annual level recorded, the Insolvency Service said.
There was also a spike in the number of people going insolvent in the run-up to Christmas.
Between October and December, there were 34,108 personal insolvencies - an increase of more than a third (34.8%) on the previous three months.
The Insolvency Service said personal insolvencies in the fourth quarter of 2018 were at their highest since the second quarter of 2010 - due to IVAs rising to a record high quarterly level, with 22,717 IVAs recorded.
Stuart Frith, president of insolvency and restructuring trade body R3, said: "As banks and other lenders have tightened their credit standards in response to the Bank of England's concerns around consumer over-indebtedness, many people have run out of road.
"In previous years, the 'helicopter money' provided by PPI refunds, along with generally less stringent lending requirements, helped to paper over the cracks that opened up as a result of a decade of persistently stagnant wage increases, but these avenues look to be closing themselves off.
"People are having to spend more of their income on housing and transportation, leaving less left over for savings and making budgets more vulnerable to shocks."
Mr Frith said of the corporate insolvency figures: "The pressure point for businesses most frequently cited by our members is weak consumer demand.
"People just don't have much spare cash at the moment, reflected in the rise in the number of personal insolvencies also confirmed today."
He continued: "Every business is part of a network and one struggling business will affect others.
"R3 research from the middle of last year found that one in four UK companies had taken a financial hit following the insolvency of a supplier, customer or debtor in the previous six months, illustrating the reach and impact of the 'domino effect'.
"It has also prompted some companies to stockpile, putting a squeeze on cash flow and reserves."