By Owen Tonks

Kerry Katona has allegedly been on a massive £140,000 spending spree despite being bankrupt and on the verge of losing two houses.

The former Atomic Kitten spent the cash on clothes, trips to the spa and alcohol, reports the News of the World.

Kerry allegedly faces eviction after failing to keep up with the £2,450 monthly mortgage repayments on her Cheshire home. A team of accountants have been employed to deal with her financial issues and have been able to organise £8,000 a month to help Kerry.

A source said: ”The £140,000 was a final lump sum from the accountants and that is her pot of money completely gone now. She hasn’t earned much for months but in court on Wednesday she promised to start paying her mortgage.

“Kerry has had months to sort this out but instead she has stuck her head in the sand and refused to pay. Now she actually hasn’t got the money to pay it and if she doesn’t find it from somewhere the mortgage company will send in the bailiffs.”

Deloitte, the firm dealing with Kerry’s finances, have said in a statement: “Whether somebody is bankrupt or not they must pay their mortgage or face losing their home.”