Almost 20,000 personal insolvencies are expected in the first three months of 2006, of which 6,500 will be as a result of excessive Christmas spending, according to Grant Thornton's personal insolvency practice.
The prediction comes in the wake of record numbers of personal insolvencies in 2005, which are expected to top 66,000.
"Despite reports by many retail indices pointing to a slowdown in consumer spending, the number of personal insolvencies has continued to soar and is likely to worsen after Christmas," said Mike Gerrard, head of the personal insolvency practice.
"Many people will have funded Christmas shopping sprees on their credit cards this year.
"A little overspend will not break the bank for most, but for those who are already financially over-stretched, spending that little bit more during the festivities may represent the last straw that breaks the camel's back, plunging individuals in already precarious financial positions further into debt and quite possibly towards bankruptcy.
"An individual with serious debts will typically have a mortgage in the region of £50,000 to £100,000 and commonly credit and store card debts of £50,000 or over.
"Whilst this may sound like a warning call to stay away from the high street, the fact remains we regularly see people, especially over Christmas, add to their problems in quite a substantial way."
Mr Gerrard pointed out that there are signs of consumers starting to take a fresh look at their finances.
He continued: "Recent figures from the British Bankers Association show that many consumers with variable rate mortgages have clearly taken advantage of August's interest rate cut to consolidate their debts by remortgaging their homes.
"But difficulties arise if borrowers do not change their spending habits and then fall behind with the higher repayments they are often committed to, as they can then be forced to sell their home."