The number of people declared insolvent in England and Wales fell marginally in 2007, said the Insolvency Service.
The number of people declared insolvent in England and Wales fell marginally in 2007, said the Insolvency Service.
The number of individual insolvencies dropped by 0.6% last year to 106,645, compared to a record high in 2006.
The number of individual insolvencies dropped by 0.6% last year to 106,645, compared to a record high in 2006.
Bankruptcy orders were 2.4% higher than 2006 at 64,480, but Individual Voluntary Arrangements were down 4.9% to 42,165 last year compared to 2006.
Bankruptcy orders were 2.4% higher than 2006 at 64,480, but Individual Voluntary Arrangements were down 4.9% to 42,165 last year compared to 2006.
The number of insolvencies in the final quarter of the year fell dramatically compared to the same period in 2006.
The number of insolvencies in the final quarter of the year fell dramatically compared to the same period in 2006.
Consecutive falls
Consecutive falls
Year-on-year, total individual insolvencies in England and Wales saw an increasing trend from 1997 to 2006, peaking with a particularly steep rise at the end of the period.
Year-on-year, total individual insolvencies in England and Wales saw an increasing trend from 1997 to 2006, peaking with a particularly steep rise at the end of the period.
HOW TO GO INSOLVENT Bankruptcy: the traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets, including your house, to pay creditorsIVA: A deal between you and your creditors, overseen by an insolvency practitioner. There is less stigma, and less chance of losing your home. It involves paying some debts either in one go or over a number of years
HOW TO GO INSOLVENT Bankruptcy: the traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets, including your house, to pay creditorsIVA: A deal between you and your creditors, overseen by an insolvency practitioner. There is less stigma, and less chance of losing your home. It involves paying some debts either in one go or over a number of years
But the Insolvency Service said that the final quarter of 2007 saw the fourth consecutive decrease in both bankruptcies and IVAs.
But the Insolvency Service said that the final quarter of 2007 saw the fourth consecutive decrease in both bankruptcies and IVAs.
There were 24,846 individual insolvencies in England and Wales in the fourth quarter of 2007 on a seasonally adjusted basis.
There were 24,846 individual insolvencies in England and Wales in the fourth quarter of 2007 on a seasonally adjusted basis.
This was a fall of 3.9% on the previous quarter and a fall of 16.4% on the same period a year ago.
This was a fall of 3.9% on the previous quarter and a fall of 16.4% on the same period a year ago.
This was made up of 15,659 bankruptcies - down 1.1% on the previous quarter and down 8.3% on the same period last year.
This was made up of 15,659 bankruptcies - down 1.1% on the previous quarter and down 8.3% on the same period last year.
The 9,188 IVAs were down 8.3% on the previous quarter and 27.3% lower compared with the fourth quarter of 2006.
The 9,188 IVAs were down 8.3% on the previous quarter and 27.3% lower compared with the fourth quarter of 2006.
'Pronounced shift'
'Pronounced shift'
Pat Boyden, of accountants PricewaterhouseCoopers, said a predicted squeeze on household budgets could lead to a small wave of insolvencies later this year.
Pat Boyden, of accountants PricewaterhouseCoopers, said a predicted squeeze on household budgets could lead to a small wave of insolvencies later this year.
"In the past people have borrowed their way out, but as the housing market becomes static this will be increasingly difficult," he said.
"In the past people have borrowed their way out, but as the housing market becomes static this will be increasingly difficult," he said.
The lack of an alternative could push people towards insolvency, as they face increased fuel bills, transport costs and council tax demands, he said.
The lack of an alternative could push people towards insolvency, as they face increased fuel bills, transport costs and council tax demands, he said.
People coming off fixed-rate mortgages could also face more pressure.
People coming off fixed-rate mortgages could also face more pressure.
Figures were likely to hold for the first quarter of 2008, he predicted, before increasing again.
Figures were likely to hold for the first quarter of 2008, he predicted, before increasing again.
He said that demand for IVAs had slipped over the last year, as firms offering them became less aggressive in their advertising.
He said that demand for IVAs had slipped over the last year, as firms offering them became less aggressive in their advertising.
The Insolvency Service said there had been a "pronounced shift" towards debtor petition bankruptcies and away from creditors' petitions in recent years.
The Insolvency Service said there had been a "pronounced shift" towards debtor petition bankruptcies and away from creditors' petitions in recent years.
This has seen the proportion of debtor petitions rise consistently from 53% in 1998 to 84% last year.
This has seen the proportion of debtor petitions rise consistently from 53% in 1998 to 84% last year.
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