The latest statistics from the government show that UK bankruptcies have fallen significantly over the last 12 months.
The Insolvency Service report shows that there were 12,539 bankruptcies in Q1 this year, a drop of 31.3% on the comparable quarter last year. However, this is still a slight increase on the 12,028 bankruptcies lodged in the final quarter of 2010.
Personal insolvencies, including those attributed to umbrella company contractors, also dropped by 15.5% year on year, to 30,162, and IVAs fell 8% to 10,835 in the first quarter of 2011.
Louise Brittain, a partner in the insolvency team at Deloitte, said it was a matter of concern that individuals do not seem to be turning to the formal process for advice on handling their debts. Personal debt is still crippling many households across the UK.
She went on to point out that economy is still fragile and we cannot bank on these reductions continuing for the rest of the year. Small firms in particular will feel the effects as personal guarantees on business debts become due and the true impact of the VAT increase is felt.
Pay Boyden from PwC said there was evidence to suggest that households are currently struggling with every day financial pressures like utility bills as opposed to their existing levels of debt.
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