Record insolvencies said to snare Britain

LONDON, Jan. 2 (UPI) -- A record number of Britons will become insolvent as the U.S. subprime mortgage crisis ensnares British consumers, a published report said Wednesday.

The Grant Thornton LLP accounting firm predicted the number of British personal insolvencies will jump to at least 120,000 this year, almost triple 2004's figure, when just fewer than 47,000 people went bankrupt, Britain's Independent newspaper reported.

Grant Thornton said in a report to be released Thursday that as many as one-third of the bankruptcies this quarter will be caused by "excessive Christmas spending," despite an economic slowdown, said the newspaper, which received an advance copy of the report.

"Sadly, many individuals spend up on credit at Christmas and pay no heed to the financial warning bells," said Mike Gerrard, head of Grant Thornton's personal insolvency practice.

These shoppers now find "previous financial woes are compounded by the bills arriving from the festive season and in these situations insolvency becomes the only way out," he said.

Seven percent of Britain's adult population -- some 3.3 million people -- are experiencing serious debt problems, said the Consumer Credit Counseling Service, Britain's largest debt-advice charity, funded by the credit industry.

More than 9 million Britons are struggling to pay credit card bills and mortgages, with the average owed by problem debtors nearing $60,000.