Personal insolvencies across England and Wales have declined 10.2% in the second quarter of 2012, according to statistics from The Insolvency Service.
Official figures showed that there were 27,390 individual insolvencies, down on the same period a year ago.
Despite the UK economy having contracted 0.7% in the second quarter of the year, as confirmed in July by the Office for National Statistics, the number of personal insolvencies decreased in the same period.
Joanna Elson, chief executive of the Money Advice Trust, said: “The ongoing decline in insolvency may largely be driven by increases in the fees required to make yourself bankrupt.
“People struggling with debt often simply can’t afford the £700 it costs to go bankrupt (£525 for the deposit plus £175 for the court fee), even though that would otherwise be their best option. This leaves them in a financial black hole.”
The overall total included 8,088 bankruptcies, down 27.1% on the corresponding quarter in 2011, which The Insolvency Service attributed to the introduction of debt relief orders from April 2009.
There were 7,956 debt relief orders in the second quarter of 2012, up 9.6%, while the number of individual voluntary arrangements (IVAs) fell 6.6% in the period to 11,346.
She pointed out that the number of people using debt relief orders was on the rise as they were “one of the cheaper remedies”.
Individuals filing for bankruptcy themselves reached 6,430 in the second quarter, accounting for 80% of total cases, although the level of debtor petition bankruptcies and their share of total cases have been gradually declining since 2009.
Alec Pillmoor, head of personal insolvency at Baker Tilly, suggested that the headline figure masked the underlying financial problems that households continue to face.
He added: “The recent economic review suggests that real household income is at its lowest since 2005 and the unexpected fall in GDP reported last month has made many people question their job security.”
It comes after contrasting figures from Accountant in Bankruptcy, Scotland’s Insolvency Service.