Philip Beck, a licensed insolvency practitioner, said that a rise in insolvencies would be due to poor pre-Christmas debt management.
“Typically, people tend to put off debt problems until January because they want to have one last Christmas spending spree,” Mr Beck said.
However, he believes that it is not just consumers who are to blame for poor debt management, saying that irresponsible lenders bombarded people with high interest ‘offers’.
“Because of the amount of interest that’s charged on this debt is very high in comparison with the base rate, banks can still make a good profit out of consumer debt lending even though an increasing number of these debts are going bad… bankruptcy and IVAs are the only way out,” stated Mr Beck.
His announcement is worrying as Citizens Advice this week warned that it had advised on a staggering 1.4 million debt problems this year – 11 per cent more than in 2005, indicating the scale of Britain’s debt problem.