Bankrupt Kerry Katona is reportedly facing eviction in the New Year, after she failed to keep up her mortgage repayments.

Sources suggest that Kerry has been squandering what income she has and not paying her mortgage each month.

“She was totally hysterical when the letter arrived,” a source told The News Of The World. “She hasn’t paid the mortgage because she’s been squandering what money she has left. Kerry seemed to think she was immune from losing her home. She really didn’t think that she, Kerry Katona, would have her house taken from her.

“But now the reality has hit hard – there is no going back, Kerry has lost her home for good. It is too late to negotiate with the mortgage lender, they have given her too many chances. She has just a few weeks to find somewhere to live but she knows it is probably going to be back in a council house in Warrington where she grew up.”

Katona had been allocated some funds for her living costs by the trustees in charge of her finances, however the source claims that Kerry ‘squandered’ these also.

“Instead of paying the mortgage and being sensible, she has continued with her millionaire lifestyle and run up £200,000 worth of fees concerning her bankruptcy,” the source added. “The mortgage should have come first but Kerry thought she could wriggle out of it. Now she’s literally lost the roof from over her head.”