CHRISTMAS shopping begins in earnest this week and, as the country gets deeper into debt, many will not even look at their bills until the new year. With the number of Irish credit card customer in arrears staying steady, some commentors are not yet worried about such personal debt levels.

That is not to say there aren’t plenty who are getting in over their heads. That is why the solicitor Barry Lyons recently set up a company called Debtfree.ie for true spendthrifts who get in much too deep. Lyons, whose firm already has one of the biggest corporate insolvency practices in the country, said the service is aimed at individuals who are facing a truly bleak financial future. That means those who, at worst, could end up in bankruptcy or, at best, could end up as part of one long and perhaps futile round of credit defaulting as they try desperately to stay out of court.

According to Lyons, there are 86,000 people in Ireland whose credit rating is compromised by having judgments obtained against them. Many thousands of others are “borrowing from Peter to pay Paul” to stay one step ahead of a court judgment.

The culprit, he said, is mainly the growth of unsecured credit — now standing at about €5 billion — that has been made available. This figure is growing by 30% a year.

The number of actual bankruptcies in Ireland is still small. There were just 20 last year. Bankruptcy is a draconian option that destroys your credit rating and can take up to 12 years to discharge. It is a poor deal for creditors, Lyons said. Instead, his company helps clients put together a “scheme of arrangement”, whereby a sworn statement of the individual’s affairs is put to creditors and they try to work out a satisfactory repayment schedule. Private insolvency-type companies, which get paid out of the payments made to the creditors, are doing a roaring business in America and Britain, where insolvencies and bankruptcies are soaring.

In the UK, personal insolvencies — the next step down from actual bankruptcies — hit another record in the last quarter, up by 55% year on year. Individual voluntary arrangements (IVAs) rose by 120% and mortgage repossession orders are back to levels not seen since the last property crash in the early 1990s.

Barclaycard, meanwhile, expects to write off €1.5 billion in bad credit card debt this year. Ireland is a little further behind in the lending debt cycle, helped by an economy propped up by an extraordinary property boom.

Such insolvency companies could pick up lots of new business when the boom turns into a bust and everyone feels the effects.

SSIA holders keep saving

Bank of Ireland’s latest special savings incentive account (SSIA) survey is encouraging. The bank has found that nearly 60% of SSIA holders, whose funds have already matured, are keeping up their regular savings habit.

Nearly the same number of over-55s are saving the same or greater amounts each month, with the average deposit now €270, or €16 more than the SSIA maximum of €254.

What must be of particular interest to the banks’ investment arm is that 55% of those surveyed say they are leaving their lump sums untouched.

Is the impact of rising interest rates and the weakening of property price inflation finally beginning to have an impact by reminding people that it is not a bad idea to have a little money put aside for those inevitable

rainy days? Or is it that the people who took out an SSIA in the opening weeks and months of the scheme were among the most prudent anyway? It is entirely in the banks’ interests to encourage SSIA customers to keep saving their money — and this is not a bad thing. But it’s still early days: the bulk of the €16 billion will be paid out from next June.

Dollar slump spurs agents

In June 2005, I had the worst luck when I took my one and only shopping trip to New York. Instead of the $1.35 exchange rate for the euro that had been the case into the spring of 2005, I ended up flying into a currency exchange trough, buying my not quite so cheap bargains at a $1.20 rate.

It has become a national pastime to watch the US dollar rate and no more so than at this time of year, so anybody setting off on a trip to the New York or Boston discount outlets will be delighted to see the dollar weakening by the day.

Some American commentators believe it could end up as low as €1.40 to the euro next year, which is splendid news for Irish bargain hunters, if not for our exporters.

It probably won’t just be clothes the Irish will be snapping up either: my junk mail folder is full of offers from Florida and Las Vegas property promoters, many of whom are already booking stalls in weekend property shows here.

They are even throwing in free swimming pools, cars and holidays to Florida and Las Vegas as sweeteners, but even the most erstwhile gamblers might want to arrange a US dollar mortgage before taking the plunge.