A debt advice company has revealed a doubling of demand for its services as people struggle to cope with their borrowings after Christmas.
Debt Free Direct said it had set up 438 Individual Voluntary Arrangements during January alone, well up on the 193 during the same month of 2005.
Under an IVA, creditors agree to freeze interest on people's debts in exchange for their agreeing to repay a set amount each month, usually for a term of five years.
The number of people taking out IVAs has soared in recent months as increasing numbers of consumers realise they can no longer cope with the high levels of unsecured borrowing they have taken on.
Government figures released last week showed that a record 13,501 people had gone bankrupt during the final three months of 2005, while the number taking out IVAs had more than doubled to 6,960.
Debt Free Direct attributed the steep rise in the number of IVAs it was handling to a combination of more people struggling to keep up with debts, as well as increased awareness among consumers about where to get help.
It received more than 17,000 calls between December 27 and January 8, the equivalent of 177 calls an hour, and twice as many as it experienced during the post-Christmas period last year.
The group offers free debt advice to people but charges a fee to set up and manage an IVA. It would not disclose what its fees were but across the industry they average £2,700 to set up an IVA and £75 a month to manage it during its term.
The Aim-listed group, based in Chorley, Lancashire, r eported a turnover of £1.6 million during January, well up on the £788,000 during the same month of the previous year. During the three months to the end of January turnover averages £1.5 million a month.
Debt Free Direct said it expected profits to come in at the top end of analysts' fore-casts, which have ranged from £4.2 million to £4.9 million for the year to the April 4.
Meanwhile, pawnbroker and jewellery retailer Albemarle & Bond Holdings reported a 12 per cent jump in pretax profits to £3.3 million for the six months to December 31.
The group - which has six outlets in Birmingham - said income from pawnbroking grew by 21 per per cent, although it claimed only a small part of this was likely to be a result of people struggling because of the high levels of debt they had taken on, adding that the average pawn loan was just £90. It attributed most of the rise to an expansion in the number of shops the company had, including the acquisition of 12 more sites during the six months.