More than four people have been declared bankrupt every day in Northern Ireland since April, Enterprise Minister Arlene Foster has revealed.
Some are large property developers owing more than £100m because of failed schemes.
House values have plummeted and some lenders are unwilling to renew loans.
John Gordon, senior partner at Napier and Sons legal firm, said: "The biggest reason is the relief of stress, never mind relief of debt.
"It does not matter if they owe £10,000 or £10m, if they are not sleeping at night, they are shouting at their children, they are gambling, bankruptcy may be the way forward."
According to fresh figures from Mr Foster, during the financial year from April to January 10 there have been 1,164 bankruptcies. That compares to 906 in 2007/8. The statistics were revealed following a question from SDLP MLA Colum Eastwood.
Mr Gordon added that he regularly met people who saw bankruptcy as an option.
"They are here at their wits' end - credit card debts, their house is under water," he said.
"We have had a lot of property developers - two from the Republic with debts of over £100m each," he added.
He said people were buying a new house, then were unable to get a mortgage because the prices fell and there was no equity in their existing houses.
Mr Gordon said there were benefits to going bankrupt: "He will get a fresh start, he will not move out of his house, because there is no equity in that," he explained.
Builders have been particularly hard-hit by the economic downturn. Northern Ireland's construction industry was dealt a hammer blow in October 2008 as property development firm Taggart Holdings called in the administrators.
Formerly one of Northern Ireland's largest building companies, Belfast-based Taggart blamed its problems on the sharp slowdown in the property market.
The company, whose workforce was cut from 150 to 15 in the 18 months preceding the move, said administrators had been called in at the request of its bankers, Ulster Bank and Bank of Ireland.