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Insolvency levels continue to fall in England and Wales

The number of people declared insolvent in England and Wales fell by 6.1 per cent in the second quarter of the year compared with the same period in 2012.
However, there was a small increase in insolvencies compared with the previous quarter, according to the new Insolvency Service figures.
Insolvency levels have been on a downward trend since 2009. Although the number of companies declared insolvent has fallen year-on-year, the data suggests the number companies to enter administration is similar to 12 months ago.
There were 622 firms entering administration in April to July, compared with 625 a year earlier.
Companies wound up totally – placed into liquidation – rose by 10.5 per cent compared with the first quarter of the year, but fell by 2.1 per cent compared with April to July last year.
Personal insolvencies have dropped in recent months, as lenders begin to show a greater level of understanding and leniency with those struggling with debts, including increased breathing space for repayments.
The courts have also been doing their best to ensure insolvency is a very last resort for individuals, encouraging some cases to seek debt advice instead.
For instance, bankruptcies have fallen by 20.1 per cent in the second quarter, compared with the same quarter 12 months ago.
Debt Relief Orders – allowing people with debts of less than £15,000 and minimal assets to write off debts without a full-blown bankruptcy – have also fallen by 10.4 per cent.
However, Individual Voluntary Arrangements – formal deals between individuals and their creditors – were up 6.8 per cent due to the reduced stigma and risk attached to repayments overseen by an insolvency practitioner.
These latest insolvency figures were published as part of a major study of household finances, indicating that more people were struggling to pay debts and bills on a day-to-day basis.
The Money Advice Service revealed more than half (52 per cent) of the 5,000 people questioned said they were struggling with money, compared with 35 per cent of those surveyed in a similar study back in 2006.

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