Home Secretary Sajid Javid has been urged to set up an emergency hardship fund to help people facing destitution as a result of the Windrush scandal.
MPs said those left with financial problems through no fault of their own cannot wait months for compensation.
On Wednesday the Commons Home Affairs Committee rushed out an urgent report to highlight the issue.
The paper cited cases including that of Anthony Bryan, a painter and decorator who was held in detention and feared he would be removed from the UK despite living in the country since 1965.
He estimates he has spent £3,000 on legal and application fees and owes £5,000 in overdue council tax and loans, and last week had his car taken by bailiffs, the committee's report said.
It also flagged up the experience of Sarah O'Connor, who moved to Britain from Jamaica 51 years ago when she was six, and has lived here ever since.
The report said: "Unable to get work and told she is not eligible for benefits, she built up large debts, she had to sell her car and in March was facing bankruptcy."
In another case referenced by the committee, Hubert Howard, 61, who arrived with his mother at the age of three, has accumulated substantial debts after being left unable to work and told he was not entitled to benefits.
The report also described how Judy Griffith, who joined her parents in the UK in 1963, was unable to work or travel after her passport with evidence of leave to remain was stolen. She got into significant arrears on her flat in London and narrowly escaped eviction.
Last month the Government urged people who were adversely affected by the Windrush failings to outline their experiences to help inform the establishment of a compensation scheme.
This call for evidence closed last week but, with a consultation to follow, the committee raised concerns it will be "many months" before compensation is paid.
Labour MP Yvette Cooper, who chairs the committee, said: "Some of the Windrush generation are facing destitution. People are having to settle legal bills, or are facing bailiffs due to debts run up when they were forced to give up work or had their social security payments stopped through no fault of their own.
"The Government must step in to help people immediately.
"Due to the seriousness of this issue, the Home Affairs Select Committee has agreed an urgent short report recommending that the Government create a hardship fund, immediately, for those of the Windrush generation facing financial difficulties."
Ministers faced a furious backlash over the treatment of the Windrush generation, named after a ship that brought migrants to Britain from the Caribbean in 1948.
Commonwealth citizens who arrived before 1973 were automatically granted indefinite leave to remain under the 1971 Immigration Act.
But some of those who arrived in the years after the Second World War have been challenged over their status.
The Home Office has identified 63 cases where people may have been wrongly removed or deported as a result of the scandal, while officials are working to establish how many people were incorrectly detained.
A Home Office spokeswoman said: "The Home Secretary has apologised unreservedly for the distress caused to people of the Windrush generation.
"These are people who have contributed to the UK over a number of decades and it is our priority to ensure that those who have struggled to demonstrate their right to be here are supported to do so.
"It is right we design a compensation scheme that effectively addresses the issues people of the Windrush generation have faced and to do that we have to listen.
"We have completed the call for evidence, which has given individuals and community groups the opportunity to share their stories and experiences."
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