Rising interest rates, escalating household bills - and Christmas just around the corner. Is it really the season to be jolly, asks SALLY CLIFFORD?

Christmas is coming and unless your pay packet is getting fat you'll be counting the cost of the festive season into the new year and beyond.

Shoppers are already out in force, and supermarket tills are ringing as people dig deep to fund their festive season.

But once the left-over turkey has been sliced into sandwiches many people will be struggling to make ends meet when they add increased mortgage payments following the recent hike in interest rates and escalating fuel bills to the Christmas spending.

Alarming figures revealed by the Department of Constitutional Affairs in August showed the number of people declaring themselves bankrupt in Bradford had risen by more than a third in 12 months. A total of 116 individual bankruptcy petitions were filed in the three months to the end of June, compared to 79 in the same period last year - a staggering 37 per cent increase.

Personal bankruptcies, often blamed on rising utility bills and credit card debt, also soared in West Yorkshire from 294 to 390, indicating the growing number of people struggling to pay off debts.

One Bradford mother, who wishes to remain anonymous, was forced to file for bankruptcy after claiming she was left penniless following a relationship split.

She says budgeting helps her get by and she has had to down-scale the type of gifts she would normally give to her children for Christmas. She appreciates the pressure on parents to buy the latest toys and gadgets.

"You want them to be like everybody else, so parents do get into debt to buy them but they (children) have to appreciate what they've got," she says.

Being in debt, she believes, was a valuable lesson learned. "I appreciate things a bit more now and I'm good with money. I'm getting by but I've got no stress and that's a weight off my shoulders. I'm a lot happier in myself."

Her story reflects that of many people. For some, the story doesn't have such a happy ending. In extreme cases, some people have resorted to suicide as a way out of their financial crisis.

The Conservatives recently pledged to tackle Britain's increasing personal debt problem with a six-point plan to improve understanding and provide greater information to avoid people getting caught up in financial complexities that can lead to debt.

The Tories also call for greater corporate responsibility with a cooling-off' period on store cards and clearer information on the cost of debt.

Speaking at a Conservative Party Debt Summit in London last week, Shadow Chancellor George Osborne claimed the British public owed £212 billion, excluding mortgages, and that nine people were declared bankrupt every hour.

The Citizens' Advice Bureau has seen an alarming increase in the number of consumer debt inquiries its staff deal with. In the last eight years inquiries have doubled, to the extent that the Bureau is now handling more than one-and-a-half million new debt problems every year.

Liz Reveley, specialist services manager for Bradford Citizens' Advice Bureau, says in 2004/05 the Bureau dealt with £6.3m worth of debt. This rose to £7m in 2005/06. Debt inquiries are also on the increase with 4,700 in 2004/05 rising to 6,000 in 2005/06.

"I think some people are over-committing themselves but the vast majority are managing until something happens and they can no longer keep up," says Liz. "It's a fine line between credit and debt. They see debt as credit that has gone out of control.

"A lot of us have a lot of credit but if something happens like redundancy, illness or a relationship breakdown, those are things that push people into debt. Or a small rise in interest rates tips thousands more people over the edge into unmanageable debt."

Liz and her team regularly see the devastation debt can cause to those with financial problems and their families.

She says many people believe their situation is so bad they've spoken of suicidal thoughts. Her advice is to seek help immediately rather than let your financial situation spiral out of control. "People worry a lot about debt, it's one of those things people lie awake worrying about," she says. "It's also one of those advice areas where we can do a huge amount to help people.

"Often, when people come to us we're the first people they talk to, as they may not have told their partner and you can see the weight lifted off their shoulders. They walk out with a sense of relief because there are a lot of things we can do to help manage it and get it back under control."

Liz added: "People do think they should take responsibility themselves and not take credit out if they can't afford it, but it's not always that straightforward because some people do it when they can afford it then have a change in circumstances.

"Redundancy or illness are quite significant for people, or having a baby - these are things that see a change in circumstances. But I agree people should look very carefully at whether they are able to commit themselves. I also think lenders have a responsibility not to encourage people to borrow more than they can afford."

On the run-up to Christmas, one of the biggest spending sprees of the year, Liz and her team are preparing for the financial fall-out in the new year when consumers' credit card bills come in.