The number of people declared insolvent in England and Wales rose by nearly 9% during the third quarter of the year.
A total of 27,087 people were made insolvent during the period, 8.8% more than during the second quarter of 2008 and 4.6% more than during the same three months of 2007, the Insolvency Service said.
At the same time the number of companies put into administration soared by more than 50% year-on-year to 1,007 in the three months to the end of September.
Within the total for individual insolvencies, a record number of people were declared bankrupt on a seasonably adjusted basis.
A total of 17,341 people were made bankrupt during the three months to the end of September, 12.1% more than during the second quarter and 9.5% more than during the same period of the previous year.
A further 9,746 people took out individual voluntary arrangements (IVAs), under which interest on debt is frozen in exchange for a set amount being repaid each month.
This represented a 3.3% rise on the previous three months, but was 3.1% down on the third quarter of 2007.
Commentators warned that the figures were "the beginning of the storm", and the number of people being declared bankrupt or taking out an IVA was expected to continue to increase as the economic downturn gathered pace.
Mark Sands, director of personal insolvency at KPMG, expects a record 150,000 people to be declared insolvent during 2009. He said: "The downturn and the associated increases in unemployment are starting to have an impact.
"This is being seen not only in the increase in personal insolvencies but also in the related issues of increased mortgagee possessions and the greater use of charging orders by unsecured lenders who have not been paid.
"Whilst consumers will fight to keep their family homes, and both lenders and the courts have systems in place to ensure that possession is the last resort, once the property is sold there is often little reason for someone with other significant debts not to declare themselves bankrupt."
Howard Archer, chief UK and European economist at IHS Global Insight, said: "There can be little doubt that the marked rise in the number of individual insolvencies in the third quarter is only the beginning of the storm."
He said recession, rising unemployment, higher debt levels, and increasing numbers of people being trapped in negative equity would all drive up the figures during the coming months.
He said: "While the sharp cut in interest rates by the Bank of England this week will obviously be of some help, it is likely to be insufficient to save many people from insolvency, particularly if it is not fully passed on."
KPMG said it had seen an increasingly large proportion of homeowners taking out IVAs during the past year, with people with mortgages now accounting for 45% of those seeking help, up from 30% last year.
The average debt owed by someone taking out one of the arrangements is now £48,400, but the group said it saw 500 people during the third quarter who had amassed borrowings of more than £100,000.
Figures from the Insolvency Service also showed that 5,998 people in Scotland were declared insolvent during the period, 70% more than during the same three months of 2007.
Personal insolvencies rose by 14.2% year-on-year in Northern Ireland to reach 386.
Corporate insolvencies in England and Wales are now rising at their fastest pace for 18 years.
A total of 4,001 companies were put into liquidation during the third quarter, 26.3% more than during the third quarter of 2007 and 10.5% up on the previous three months.