Debt charities are gearing up for a barrage of calls once their help lines re-open on January 3rd as the scale of people’s holiday spending catches up with them.
Although consumer borrowing on credit cards and homeowner loans has been relatively calm over the year, finance experts are predicting that millions of people will overspend this Christmas.
Accountancy firm Grant Thornton has estimated that the problem is so bad that record numbers of people will file for bankruptcy through the beginning of 2006 as a consequence of their holiday excess.
A report by the company has predicted that the first three months of 2006 will see 20,000 personal insolvencies, with around 6,500 of these the direct result of people taking on too much debt over the holiday season.
The Consumer Credit Counselling Service is expecting 20,000 calls over the course of January, double what it received in December, and the Citizens Advice Service says that it is bracing itself for a flurry of activity in the New Year.
“Many people will be funding their Christmas shopping sprees on their credit cards this year, said Mike Gerrard of Grant Thornton.
“A little overspend will not break the bank for most, but for those who are already financially overstretched, spending that little bit more during the festivities may represent the last straw that breaks the camel’s back, plunging individuals in already precarious financial positions further into debt and quite possibly towards bankruptcy.”
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