Are You Going Broke In 2007?

A report out by Grant Thornton, predicts that nearly 30,000 personal insolvencies will happen in the first quarter of this year, of which 10,000 will be as a result of overspending at Christmas.  The company also points out that there was a record number of personal insolvencies in 2006, and that it was in the period immediately after Christmas that the highest number of people in this position surfaced.

In the days following Christmas just gone, the news bulletins on TV reported  the huge numbers of people continuing to spend in the 'January Sales' and the record takings enjoyed by many big stores, after an already busy seasonal shopping period,

For those consumers with a manageable amount of total debt, a bit of overspend is containable. For those with more serious debts however - those, who, according to Grant Thornton, have 'a mortgage in the region of £50,000 to £100,000 and commonly credit and store cards of £60,000 or over' - reckless spending at Christmas could well prove to be the catalyst that drives them into insolvency.

Interest rates have been rising as have utility prices, and inflation is at a nine year high, and the first few months of the year can be quiet for some businesses, so average incomes in this period can be lower than during the rest of the year.

For those contemplating a difficult repayment period ahead, it is necessary to take action now. Don't leave matters until it's too late. Get back to basics.

• Firstly, get your free online credit report from Credit Expert at Experian by clicking here. and see just what your financial standing is.
  
  
• Secondly, gather together all your paperwork relating to your debts, bills, incomes and assets and create an up to date budget.
  
  
• Thirdly, take some action. Any positive action to reduce your debts is better than doing nothing.
  

There are difficult times ahead. The 'live now pay later' mentality that has pervaded modern society, has led to a manic disregard for the way money works. It must now be realised that, for many, 'later' has already arrived.