Insolvencies to hit record level as Christmas debts kick in

Experts today predicted a surge in the number of personal insolvencies for March as Britons suffer the hangover of overspending at Christmas and warned that even more people will face bankruptcy in 2010 than last year's record high.

The insolvency trade body R3 said the stigma of going bust means some Britons wait several months before admitting the scale of their debts, meaning the hangover of an expensive Christmas kicks in from March.

Its research showed 31% of personal insolvencies recorded in March were triggered by overspending during the festive season.

R3 predicted the number of personal insolvencies in the UK would this year rise above 150,000, higher than last year, when 134,142 people in England and Wales were declared insolvent.

Peter Sargent, president of R3, said: "Many people who were struggling financially at the end of last year allowed their spending to spiral during the festive season, to give their families a normal Christmas.

"They will now be suffering, having seen debts snowball since the large credit card bills began to hit their mats in January."