The former glamour model, 41, has worried pals after her financial misery and spiralling debt has left her "rushing around the place" and unable to eat properly.
The brunette bombshell is thought to be flogging her pricey possessions and selling products online in a last-ditch attempt to recover some of her finances, however she is now rumoured to be physically suffering.
A source close to the TV star spoke to Sun Online about Katie's "worrying" weight loss and "liquid diet" due to the stress of her problems, not only with the bankruptcy but also fears she could be homeless by Christmas.
The insider revealed to the publication: "Katie's dropped around a stone in two weeks, it's really worrying."
They added: "She's rushing around all over the place, and is really stressed out. She hasn't cooked a proper meal in weeks and is practically on a liquid diet."
The 'worried' source blamed Katie's dramatic weight loss on her being declared bankrupt.
Just last week, Katie's fortunes took a tumble after it was revealed she owed £800,000 to creditors.
The source continued: "Even when she went to Sheesh the other night she only ate a couple of prawns and a bit of meat. Normally, Katie loves junk food and takeaways so everyone's really worried."
It has been reported that the skint star has resorted to flogging off her belongings, including the £230,000 diamond engagement rings ex-husband Peter Andre bought for her.
After a chaotic few week, it seems that Katie's bankruptcy woes could leave her forced out of her infamously mucky mansion just before Christmas.
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