A Christian charity has warned that millions face financial ruin in the aftermath of recent mortgage rate rises.
The warning comes as Chancellor Alistair Darling urged Britain's banks to take a more cautious approach to lending.
In an interview with the Daily Telegraph, Mr Darling said both lenders and borrowers needed to "think long and hard" about the risks involved.
He also suggested a return to "good, old-fashioned banking" and voiced concern over loan consolidation TV ads.
His comments come amid volatile markets and concerns about the scale of debt taken on by British consumers.
Keith Tondeur from Christian charity Credit Action, told Ekklesia: "Rises in interest rates over the past year or so coupled with the end of millions of fixed-rate mortgage deals could spell misery and financial ruin for many over the coming months.
Credit Action is also alarmed at the huge increase in the numbers of people trying to avoid repaying their debts by seeking out what they see as easier options such as bankruptcy and Individual Voluntary Arrangements.
"People still take far too long to seek help when they first get into financial difficulty and allow themselves to sink in to unmanageable levels of debt. At the first sign of trouble one should seek free help from a charity like Consumer Credit Counselling Service or Citizens Advice" Tondeur said.
The Chancellor said that banks themselves should bear some of the responsibility for people getting into problems with debt they cannot handle.
"Institutions have in some cases been prepared to lend to people without actually checking if they were ever going to repay it," Darling said.
He also suggested the City and financial institutions should take a more sceptical approach to new and complex financial instruments which appear to offer spectacular rates of return.