Insolvencies caused by overspending at Christmas

Date: 12th March 2010

There will be more than 150,000 personal insolvencies this year, according to new estimates.

R3, the trade body for insolvency professionals, said financial constraints brought about by the recession and a tendency to overspend during the festive period could be key contributors to the forecast.

Recently published figures from an R3 report revealed that one-third of insolvencies that occur in March come as a result of people blowing their Christmas budgets.

Peter Sargent, president of the organisation, said: "Unfortunately, many people who were struggling financially at the end of last year allowed their spending to spiral during the festive season, in order to give their families a 'normal Christmas'.

"These people will now be suffering from the 'Christmas Crunch', having seen their debts snowball since the large credit card bills began to hit their mats in January."

Mr Sargent urged people who are struggling to control their finances to seek help immediately and said situations are made worse by the fact that most people wait at least six months before admitting they are in trouble.