Debt experts are predicting a record number of personal insolvencies this year as excessive Christmas spending, rising mortgage payments and increased food and fuel costs all force thousands of people over their financial limits and into bankruptcy.

More than nine million individuals in Britain are now believed to be struggling to pay credit card bills and mortgages with the average debtor owing around £30,000. It is predicted that the total number of personal insolvencies will jump to at least 120,000 this year almost triple the 2004 figure when fewer than 47,000 people went bankrupt. Despite the economic slowdown, many people have been loading large amounts of debt onto credit cards and taking out personal loans. Although shoppers were expected to curtail their spending this Christmas, high street shops and online retailers report higher than forecast takings in December with the New Year sales being busier than expected resulting in predictions that as many as one third of bankruptcies in the first three months of 2008 will be caused by "excessive Christmas spending".

Polls conducted in November showed that 38% of new applicants for credit card and 19% of applicants for new personal loans were rejected whilst 6% have had their credit card limits reduced. It is believed that 7% of the adult population is experiencing serious debt problems which would represent about 3.3. million people in the UK.

http://news.independent.co.uk/uk/this_britain/article3300968.ece

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