AFTER the traditional Christmas spending binge, New Year bills could provide the painful moment of reckoning . . . with perhaps 10,000 personal insolvencies triggered by the holiday celebrations. That's the prediction from accountants Grant Thornton, who expect about 30,000 personal insolvencies in the first three months of 2007. Personal insolvencies in 2006 topped 100,000 for the first time. "Since last Christmas," says Grant Thornton's Mike Gerrard, "interest rate rises, sky-high utility bills and increases in unemployment have all contributed to pushing more people into financial trouble." Average household debt in the UK is £51,400, including the mortgage, or £8,600 without. Freespending Britons owe a third of all the debt in Europe. But Stuart Glendenning, at www.moneysupermarket.com, the personal finance website, says the typical household could save £5,168 in 2007 - simply by reviewing its finances. This simple checklist should cut your regular spending: * Avoid crippling interest on store card debts - by consolidating debts into a low-cost personal loan. Alliance & Leicester says a consumer with £7,500 in debts could save £1,500 in annual interest charges by taking its loan at 5.95% APR over three years. With store cards charging interest up to 30%, there's a case for dumping them altogether. * Cut your mortgage costs: switch from a standard variable rate (SVR) loan at 7.25% to a low fixed rate like the Derbyshire BS 4.69% two-year fix to save £230 a month, or £2,667 over a year. With fears of bank base rate hitting 5.25% in February, lazy homeowners could get a nasty shock if fixes expire in 2007 and leave them on a (much higher) SVR. Make sure you negotiate a new fix, quite probably with an existing lender, before that happens. * Switch Your Plastic: despite a crackdown on penalty charges, plenty of cards in a highlycompetitive market still offer 0% deals on both balance transfers and purchases. By switching a £2,000 balance from Natwest Classic charging 16.9% APR to one of 48 cards with an introductory period of 0% on balance transfers, www.moneysuper market.com says the annual saving is £305, after the balance transfer fee is deducted. Another finance website, Moneyfacts.co.uk, says 0% deals lasting 12 months are back in fashion - with HSBC and Virgin promising 0% deals for 15 and 13 months respectively. That Virgin 0% promise on balance transfers is paired with an introductory three-month period of 0% on new purchases. | 
