In research carried out by Grant Thornton, some 10,000 people are set to file for bankruptcy during each month of 2008 after becoming unable to pay loans, credit cards, mortgages, household bills and other financial demands. Meanwhile, it was put forward that about a third of those claiming themselves insolvent over the first quarter of this year will have done so as a result of overspending during the Christmas and new year period. However, it is thought that personal insolvency figures for the coming three months will be slightly below those achieved during the corresponding period last year. The estimates come following the record levels of insolvencies noted during 2006, in which such people struggling with their finances surpassed the 100,000 mark for the first time.

Overall, the accountancy firm reported that personal insolvencies will stand at about 120,000 during this year. Such a figure is almost triple that recorded in 2004, when just 47,000 Britons declared themselves unable to manage demands on their spending. As such, it appears that many more people now cannot meet regular constraints on their income such as utility bills and transport costs. For such consumers, a debt consolidation loan may be another way of getting into a more secure financial position.

Commenting on the figures, Mike Gerrard, head of Grant Thornton's personal insolvency practice, said: "Sadly, many individuals spend up on credit at Christmas and pay no heed to the financial warning bells. Come January, they find themselves in a situation where previous financial woes are compounded by the bills arriving from the festive season and in these situations insolvency becomes the only way out."

Research from the firm also revealed that continued living costs increases are due to weigh on people's ability to manage their money. During the past year, the price of filling a car with unleaded fuel has gone up by some 16 per cent. As a result, it was suggested the average person is now having to pay an extra 155 pounds per year on petrol. Mr Gerrard added: "Coupled with rapidly increasing gas and electricity prices, which are forecast to jump by more than ten per cent early this year, it's easy to see how those already struggling to pay off credit, particularly those servicing mortgages, are caving in to the pressure." In addition, Grant Thornton stated that more Britons may come under monetary pressures as the property sector slows down over 2008 and banks and other financial providers become more stringent on the issuing of loans and other types of credit.

For those who have previously have had problems in paying back borrowing but are confident that they will now be able to do so successfully, applying for a bad credit loan may be advisable. In taking out such a loan, borrowers may able to meet various demands on their spending over the coming year and avoid incurring the damage to their credit history that filing for insolvency would entail. Bad credit loans may be particularly useful for people in Cardiff after Jenny Willott, Welsh Liberal Democrat MP for Cardiff Central, reported that those living in the city and the surrounding area are in an "unsustainable" financial position.