The Scottish Government is to host the first national conference to tackle funeral poverty as a new report revealed some people are resorting to crowd-funding to help cover the cost of burials or cremations.
Social Justice Secretary Alex Neil said ministers were concerned about some Scots taking on "unmanageable debt" to pay for a service for a loved one.
He made the comments as an independent report highlighted the problem of funeral poverty and made a number of recommendations.
About 55,000 funerals take place in Scotland every year, with an average cost of £3,550, but it is estimated about 10% of people will struggle to pay the cost.
A report by Citizens Advice Scotland and John Birrell, chair of the Scottish Working Group on Funeral Poverty, said there were "many informal ways which those facing difficulty in paying for a funeral attempt to increase their own resources".
These include borrowing money from a bank or credit union, arranging a short-term loan, selling personal items and collecting cash from family and friends.
The report also said people had arranged fundraising events and added: "We have also been made aware of people using crowdfunding and of the development of sites specialising in this."
While some people are eligible for a social fund funeral payment to help with the cost, rising costs meant that in 2015 there was an average shortfall of £2,316 the report said.
It called for councils to accept that rising burial and cremation costs are part of the problem and recommended the Government consider changing the law so that local authorities would have to justify any above inflation increases.
With responsibility for the social fund funeral payment to be devolved to Scotland as part of the Smith Commission recommendations, Holyrood ministers should seek to improve the scheme and ensure it pays enough cash to cover the cost of a basic service.
Another recommendation is for a Scottish Funeral Bond to be established, which would standardise costs for a simple service, and allow more people to save for their own funeral.
The Scottish Government has already said it will consider this as part of its response to the report.
Better arrangements are to be put in place to monitor the problem of funeral poverty and Mr Neil will hold a series of discussions about how to deal with the problem as well as a national conference.
He said: "This report outlines a number of recommendations to tackle the problem head on, but we know that we can't solve funeral poverty alone, which is why we will bring together funeral directors, charities, councils and health and social care services for the first ever national conference on funeral poverty."
Mr Birrell warned if action is not taken "bereaved relatives are going to experience more and more distress".
He added: "I hope the suggestions made in our report will go some way to mitigate this."
Citziens Advice Scotland chief operating officer Anne Lavery said advice bureaus had reported "significant increases in the numbers of people coming to them for advice on funeral costs".
She stated: "In the last year alone the number of cases has risen by 35%, with approximately one in every 30 funerals in Scotland resulting in someone seeking advice from Citizens Advice."
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