According to new figures released today, the number of individuals becoming insolvent has fallen to the lowest level for a decade.
Official statistics from the Insolvency Service show that a total of 79,965 people were left with unmanageable debts last year, down 19% on 2014 and the lowest since 2005.
Throughout 2015, the number of insolvencies declared stayed comparatively low, despite an increase in debt problems in the latter part of the year. Between October and December, the total number of insolvencies rose by 3.6%, but was still lower than the same period in 2014.
The drop was shared by the number of companies entering into insolvency in 2015, which was 10% lower than the total in 2014 and the lowest annual total in over 25 years.
The report by the Insolvency Service suggests the figures are driven by a decrease in compulsory liquidations (winding up orders) and a fall in individual voluntary arrangements which were at the lowest level since 2008. There was also an increase in debt relief orders, resulting in a widening of the criteria for those eligible for financial assistance.
Reacting to the announcement, Kathryn Maclennan from Stephensons commercial law team, said: "There continues to be a steady decline in insolvency across the board and the change in the debt relief order criteria has given a greater number of people access to this option.
"Options within formal insolvency are to be encouraged but both individuals and companies need to take advice as soon as possible to be aware of the avenues are available to them.
"We still have a climate of low inflation and low interest rates which has helped both individuals and companies to service the debt they do have. However, this has been to be seen against the back drop of rising debt generally particularly with consumers which saw an increase towards the end of 2015.
"It is clear that there is still significant debt in the market which is not reflected in these figures and it is impossible to say if and how that debt is being managed."
If you are worried about unmanageable debt, regarding personal finances or a business debt, speak to Stephensons' specialist insolvency solicitors: 0175 321 6399