Fewer people were declared insolvent in England and Wales during 2011 than the previous year, even though personal insolvencies hit a higher level than before the credit crunch.
Overall numbers were down 11.3% to 119,850 compared to 2010’s record high, said the Insolvency Service.
However, one in 366 people became insolvent in 2011, compared with a 25-year average of one in every 1,600.
The figures reflect that people are also choosing to manage their debts in different ways.
Bankruptcies were down 29%, with many arguing that the £700 fee makes the option too expensive for people struggling with their finances and borrowers are keen not to put their home at risk.
Other insolvency option is an individual voluntary arrangement (IVA), which lets an insolvency practitioner cut a deal with your creditors.
The figures only apply to England and Wales. Insolvency statistics for Scotland were released last month, showing a 2% increase in personal insolvencies in the last three months of 2011. The Accountant in Bankruptcy (AiB) revealed 4,664 people were declared insolvent in Scotland in the quarter – down 13% on the previous three months.
Debt advisers are also reporting a massive increase in the number of people asking about financial management plans to help them manage their finances better.
The Citizens Advice Bureau reported handling an average 8,652 new debt inquiries a day in January.
Debt charity Credit Action reckons in January that 331 people went insolvent every day and a home was repossessed every 14 minutes 17 seconds.
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