3 January 2008
Britons unable to pay back what they owe in personal loans and credit card repayments will become insolvent in greater numbers this year, Grant Thornton said today.
According to the accountants, consumers overspending on credit at Christmas will result in 28,000 either declaring bankruptcy or entering into an Individual Voluntary Arrangement by March.
A total of 120,000 were predicted to become insolvent before the end of the year.
Head of Personal Insolvency at Grant Thornton Mike Gerrard said: "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."
Last week, the Financial Services Authority released research showing that many Britons were "fearful" of their New Year bills following the festive overspend.
The study found that 23% of British 16 to 44-year-olds had taken out a personal loan or used a credit card specifically to cover their Christmas costs.
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