10,000 people to go bust after festive spending sprees

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  • Accountants predict 10,000 people will go bust after Christmas spending sprees

    Ten thousand people will head for financial freefall in the first three months of the year as a result of Christmas cash-splashing, it has been claimed today.

    Christmas casualties are likely to make up one third of individuals expected to fall off the financial cliff in the first three months of 2008; accountants Grant Thornton expect 28,000 people to either go bankrupt or enter a binding individual voluntary arrangement to repay debts by the end of March.

    The firm also believes that the total this year will hit a record 120,000 bankruptcies, 10,000 more than in 2007.

    There are particular concerns for 1.4 million homeowners who are due to come off cheap fixed-rate deals in the next 12 months, with more expensive deals typically adding between £200 and £600 in monthly repayments.

    Head of personal insolvency, Mike Gerrard, told the Daily Mail: ‘Sadly, many individuals spend up on credit at Christmas and pay no heed to the financial warning bells.

    ‘Come January, they find themselves in a situation where previous financial woes are compounded by the bills arriving from the festive season and in these situations insolvency becomes the only way out.’

    Gerrard also blames the increasing cost of living for financial fallouts.

    He added: ‘Take for example fuel prices. In only 12 months the cost of filling up a vehicle with unleaded petrol has increased by 16 per cent, which means Joe Public is now having to find an additional £155 this year to fill up the car.

    ‘Together with increasing gas and electricity prices, which are forecast to jump by more than 10per cent early this year, it’s easy to see how those already struggling to pay off credit are caving in to the pressure.’

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