A THIRD of people who go insolvent during the first three months of the year will have been tipped over the edge by excessive Christmas spending, a report predicts today.

It is estimated that 28,000 people will be unable to cope with their debts during the first three months of 2008, and will either file for bankruptcy or take out an individual voluntary arrangement.

The question they will be asking themselves will be: "Was it really all worth it?"

Perhaps even more worrying is the prediction that 120,000 will go insolvent this year - the equivalent of 10,000 people a month.

Of course, it has become easier to become insolvent and some will use this to their advantage.

But there are many that have fallen into a vicious cycle of debt during a period when it was so easy to obtain credit.

But with banks now tightening their lending criteria, the housing market continuing to slow down and the threat of higher food and fuel bills, the outlook for 2008 is bleak.

And with the credit crunch yet to fully bite in the UK, it seems the financial outlook is extremely gloomy.