RATHER than loosening those purse strings this Christmas, banks and solicitors are advising businesses and consumers to keep an eye on festive debt.

HSBC has warned its

business customers against lavish seasonal spending on gifts for clients and seasonal staff perks, like parties and bonuses.

Simon Wainwright, head of business banking at HSBC, said: "Although every business is different, the key thing to watch when budgeting for Christmas is ensuring your commercial decisions aren't clouded by over-enthusiasm."

"Otherwise, when the wine crates are wheeled away and the mistletoe has wilted, you could find

yourself in for a shock."

Top York law firm Langleys is warning individuals not to break the bank.

The first two quarters of 2005 showed a dramatic increase in the number of bankruptcies, with annual figures topping the 60,000 mark - 70 per cent up on last year.

Solicitor Stephen Baylis said: "Credit providers have already tightened procedure in light of the slowdown in the housing market.

"These institutions will not in the future be able to assume that home owners have automatically accumulated excess equity due to house price inflation. This is bound to increase the levels of personal insolvency."

Updated: 11:08 Tuesday, December 06, 2005