Overindulging when it comes to your finances.

Overindulgence during the festive period is normal, but be careful about overindulging when it comes to your finances. What can you do if Christmas was a bit too much this year?

With less than a week until the ‘Big Day’ some of you may have put off Christmas shopping until the last moment.  Whilst you may have been lucky enough to bag a few bargains, especially with the ever lengthening Black Friday events (now including Cyber Monday) and a seemingly whole week of ‘big’ sales, panicked Christmas shopping can, in other circumstances, add on the pounds – and we’re not talking from too much food!

If you’ve been able to stay within the budget, then great work! But unfortunately for some, Christmas can be a testing time for the finances and where most employers tend to pay slightly earlier, January can prove a difficult and long month.

What can you do to help prevent financial worries before they strike?

The obvious answer is to strictly plan your present shopping list, make a note of what you’re buying and shop around for a general price range, opting for the lowest priced item. Avoid relying heavily on your credit card as that still has to be paid at some point!

For some, it is not just about the presents; those who are brave enough to invite the family and extended family around for Christmas day dinner, it’s important to factor in the cost of the food shop. Of course, the cost of this can be easily spread amongst those attending and a simple request for relatives to bring dishes with them can help alleviate the overall cost to you.

After the Event

Christmas itself, may have been well managed, or not as the case may be, but what about January?  It can potentially be the longest month in the year between pay days and with a larger than normal expenditure often being incurred for Christmas, it can be a stressful time. Especially when the monthly bills start to come in.  Of course, we’re not just talking about utility bills – those too can be much higher with the added company at the house – for sole traders and those who are self-employed, there are the added tax bills to pay which can be a hefty sum and of course credit card bills themselves can run to the many thousands.

The most important thing is to communicate early, with whomever requires a payment. They may be agreeable to delaying payment until after your next pay day, to not add interest or may agree to roll the bill over for a month. If there are a number of bills which you are struggling to pay, prioritise the ones that will attract a penalty charge or significant interest for non-payment. Either way, it is important to establish an early dialogue.

You will not be the only person in a potentially difficult position. Indeed they are likely to be more understanding of your situation and (more often than not) pleased that you are showing a genuine intention to resolve the situation.

Do not try to avoid the problem

Needless to say, problems arise when you avoid the problem entirely and miss the payment dates. No one likes to be ignored and by doing so, you could be unintentionally exacerbating the issue.

It is often because of this, that the payee becomes concerned that no payments will be made at all and this usually instigates the reminder letters, leading to the more worrying demand letters.


If the money you owe exceeds £5,000, you could be at risk of Bankruptcy Proceedings being commenced.  If you do receive a Statutory Demand you must take immediate legal advice from a specialist insolvency solicitor. Upon receipt of the Demand, which is usually hand delivered, you have:

  • 18 days in which to apply to the Court to set it aside; or
  • 21 days in which to pay the amount in full in order to avoid a Bankruptcy Petition being presented.

If early legal assistance is obtained, it may be possible to enter into negotiations for an agreed repayment plan in order to avoid further proceedings.  For more information, see our dedicated bankruptcy website: www.bankruptcy-solicitors.com or call us further on: 020 8308 3610/020 8858 6971.

Court Proceedings

Alternatively, if the money owed is not at the sum of at least £5,000 but still a significant amount, then you may be risk of court proceedings being issued which could result in a County Court Judgment being registered against you. Any person or company who wishes to pursue court proceedings against you for the recovery of a debt must following the Pre-Action Protocol for Debt Claims:  https://www.justice.gov.uk/courts/procedure-rules/civil/protocol

In essence the key points are that:

  • A Letter of Claim must be sent with all of the information detailed in the Protocol to enable you to fully understand the sum being claimed.
  • The payee should provide with this Letter of Claim:
    • A statement of account (if possible);
    • A copy of the Information Sheet and Reply Form (a copy of which is annexed to the Protocol); and,
    • A Financial Statement form (an example is also annexed)
  • The payee must give 30 days for you to provide your reply on the Reply Form. If you fail to reply within that time, the payee may start court proceedings.
  • If the debt is disputed, both parties are encouraged to take steps to resolve the dispute without court proceedings. This is usually by way of some form of Alternative Dispute Resolution and if the debt is substantial, mediation may be more appropriate.
  • If proceedings are instigated, the Court will usually expect the parties to have complied with this Protocol, unless the matter requires urgent action.

Taking early legal advice

If you are struggling financially and have received a letter or other documentation which you are concerned about, you should always seek immediate legal advice from a specialist solicitor to ensure that you know what your position is and what your options are.  Not only can this help to give you some peace of mind that you are not alone, but if matters are dealt with in good time ahead of any deadline for a response, it can help resolve matters earlier. Should you wish to discuss matters with ourselves please feel free to contact Adina-Leigh Collins on 020 8308 3610/020 8858 6971.

This is not legal advice; it is intended to provide information of general interest about current legal issues.