IN the run-up to Christmas, the most expensive time of the year, the startling extent to which many people in the region are in debt has been revealed in a new survey.

The average indebted adult in the region owes more than £5,500 – excluding mortgages and student loans – according to trade body R3, which represents insolvency professionals.

Its Personal Debt Snapshot also found that one in eight people living in the North-East and Yorkshire owed £10,000 or more.

Meanwhile, a separate report for insurer Legal and General discovered that the average family living in the North-East is just 16 days away from being on the breadline should they lose their income.

Allan Kelly, North-East chairman of R3 and a restructuring partner at the firm Baker Tilly North East, said: “The fact that our region’s average personal debt is equivalent to almost three months wages is a cause for concern.

“That’s a lot of ground to make up if debts need to be repaid quickly or if someone’s income is interrupted.

“Personal debt levels have ballooned in the UK over the past decade and for many being in debt has become the norm – there’s less of a stigma attached.

“Where the debt is manageable, this isn’t a problem. But it can be all too easy to get caught in a debt trap, where one debt starts to create others.”

Mr Kelly said that even those with relatively low value debts needed to tread carefully.

He said: “You only need to be unable to pay £750 to one creditor and it’s within their right to petition to have you made bankrupt.

“If people have problems with their debts, early action is best. The more debt builds up, the fewer options there are.”

Legal and General said possible interest rate rises before the end of next year could add to the financial pressure on hard-pressed families.

It said the average family in the North-East would have to rely on state benefits and friends and family within 16 days of suffering a major financial shock – such as a loss of income.

The picture was slightly better in Yorkshire where the figure was 34 days.

Managing director Mark Holweger said: “The harsh reality is that many households are on the brink.

“With new economic headwinds approaching and an interest rate rise on the horizon at some stage now is not the time to be burying our heads in the sand.

“People need to think about protecting their future and not just reverting back to old habits when it comes to spending.”