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Christmas hangover continues to hit region’s consumers

Almost a third of personal insolvencies this month will have been caused by overspending at Christmas which has caught on North East consumers.

According to new figures from insolvency trade body R3, 31% of personal insolvencies that occur this month will have been triggered by people stretching their finances beyond breaking point during the festive season.

These latest figures follow a previous R3 study carried out late last year that found that more than 220,000 people in the North East - one in every eleven - were still paying for Christmas 2008, and that one in six families felt they will be struggling to make ends meet when the bills came in for Christmas 2009.

Overall, R3 members are predicting that there will be over 150,000 personal insolvencies in the UK this year, and Linda Farish, chairman of the North East arm of R3 and director of Recovery & Insolvency at Newcastle-based accountants RMT, is urging anyone facing financial problems to seek help and support as soon as they can.

She said: “Unfortunately, many people who were struggling financially at the end of last year allowed their spending to spiral during the festive season, in order to give their families a ‘normal Christmas’. “These people will now be suffering from the ‘Christmas Crunch’ caused by their debts snowballing once the large credit card bills began to hit their mats in January - with Spring round the corner, many feel like it is time for a fresh start and want to regain control of their finances.

“However, the stigma of insolvency means that many wait up to six months before admitting they have a problem, and for many people in financial difficulty, it is the biggest hurdle preventing them from seeking help.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .