The St Vincent de Paul Society (SVP) is warning of a debt "time bomb" for millions of families in the UK as the pandemic takes its toll.
The Christian charity, which supports people in financial hardship, said that many families were facing uncertainty as Britain slides into another recession.
It warns that more families once able to get by have now been pushed into the poverty zone due to the economic fallout of the pandemic, and that the true scale of the debt problem is being masked by government schemes.
Luke Denison, Debt Advice Supervisor at St Vincent's Leeds, said: "People are racking up debt, but less individuals than usual are coming forward right now.
"We believe this is due to most enforcement and eviction action being temporarily suspended, along with most creditors scaling back their collection efforts for the timebeing.
"This, coupled with the temporary raising of the Universal Credit allowance and the suspension of benefit deductions, can lead to a false sense of security for Universal Credit claimants who have debts but may not see the urgency in seeking help as their debt problems appear to be on hold."
Recent figures from the Money Charity show that 316 people a day were declared insolvent or bankrupt in England and Wales between September and November last year, equivalent to one person every 4.34 minutes.
In separate research, the Legatum Institute found that more than 15 million people in the UK are living in poverty, equivalent to nearly a quarter (23%) of the population.
Denison continued: "The fact is that existing debt issues won't go away on their own, and people delaying much needed debt advice may face delays themselves in obtaining an appointment with an advisor when debt collection activity returns to normal.
"This scenario has led the Money and Pensions Service to invest huge sums to ensure additional debt advisers are recruited, trained and ready to deal with what are likely to be record numbers of debt advice sessions."
SVP says that the pandemic is creating a "new poor" - those from working households who have either experienced redundancy or are on a reduced income on furlough and struggling to keep up with monthly payments on cars and mortgages.
While many leaders have offered payment holidays, Denison said the full impact of deferred payments would be felt once repayments resume in full - most likely at a higher rate - at the end of the pandemic.
"Some working people receiving the 80% furlough payment whose outgoings are higher because they have a mortgage, cars and other goods on finance, are putting off seeking help because they don't see themselves as needing it, but their debt situation is there and it's getting worse," he said.
There is also an emerging form of poverty - digital poverty - affecting school children who lack access to computers and the internet at home.
Sheena Eastwood, Manager at St Vincent's in Leeds, said: "Many families with school age children are also at severe risk of digital poverty.
"Homeschooling during lockdowns requires the use of the internet and hardware such as tablets or laptops, which many households cannot afford.
"This places children from these households at a great disadvantage, and potentially risks widening the socio-economic divide for generations to come."
Many families are also facing rising energy debts after spending more time at home this winter, while local foodbanks have experienced "unprecedented demand", Eastwood said.
"Many low-income households are not aware that they can apply for the Warm Homes Discount Scheme, which is a one-off payment of £140 towards winter energy bills. The payment won't cover a household's entire energy bill, but it helps," she said.
SVP is among the charities calling on the Government to retain the £20 per week uplift to Universal Credit.
It warns that 700,000 people are at risk of being pushed into poverty if the uplift is removed after April as planned.
SVP President Helen O'Shea is appealing to people to give time or donations to support more people in need.
"With rising unemployment, poverty and recession as a result of the pandemic, it is inevitable that many people, including a sizeable number of the 'new poor' who have previously never faced financial challenges, will have fallen into debt.
"Some who don't have easy access to credit will even have resorted to high interest loans to pay for everyday essentials. Many desperate people will be turning to organisations like the SVP for help and advice."
