Thousands to become insolvent by March

Of this figure, 10,000 will go bankrupt or agree to Individual Voluntary Arrangements (IVAs) as a result of excessive spending at Christmas, according to Grant Thornton.

After interest rate hikes, rising unemployment and costly energy bills last year, excessive festive spending may turn out to be the “straw that breaks the camel’s back”, the firm said.

Mike Gerrard, from the Grant Thornton’s personal insolvency practice, commented: “I expect that personal insolvency levels will continue to edge forward this year.

“While they may eventually settle down before the next Christmas, they will do so at an already high level.”

He said that high levels of festive spending could plunge those who are already struggling with their finances into more debt “and quite possibly towards bankruptcy”.

According to accountancy firm KPMG, IVAs accounted for the writing-off of £1.4 billion of consumer debt last year.

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