The number of people declared insolvent in England and Wales actually fell slightly in the last quarter, according to new Government figures.
The number of individual insolvencies fell to 24,553, down two per cent on the previous three months and down 8.3 per cent on the same period in 2007.
However, company liquidations rose by 11.6 per cent from the previous quarter to 3,560.
The figures go against predictions that the credit crunch would push IVA and bankruptcy figures up and experts say that the crisis has made people more aware of their finances, and also made banks less willing to approve loans - making it harder for people to get into debt.
But Charles Turner, personal insolvency expert at PricewaterhouseCoopers, warned that the worse was still to come.
"The ‘trickle down’ effect of the credit crunch won’t truly hit personal insolvency figures for the next six to twelve months"
“The ‘trickle down’ effect of the credit crunch won’t truly hit personal insolvency figures for the next six to twelve months as consumers in the UK turn from ‘lifestyle borrowing’ to ‘life borrowing,” he said.
“The window of easily accessible, cheap credit available to most people 18 months ago is now long gone and consumers are struggling with high interest rates on their mortgages and loans and a squeeze on their discretionary spend.
“As a result, they are turning to more expensive means of unsecured borrowing such as credit cards, high interest loans and even pay-day loans (typical APR of 1,845 per cent) which will put further pressure on their outgoings and inevitably lead to insolvencies in the coming year,” he concluded.
It is thought that more people are entering into informal debt management plans with their banks, but these are not included in the figures.
Chris Eagle, CreditChoices.co.uk commercial manager, advised struggling consumers to seek professional advice and talk to their debtors before seeking out more loans to pay their bills.
“If you are struggling to keep up with your household bills and repay your current debts then there are people that can help,” he said.
“Talk to your bank and any other debtors and explain your situation to see if they can arrange an informal debt management plan to ease the pressure for a while. “If you find that you’re still struggling to cope then get in touch with the Citizens Advice Bureau or the National Debtline - offering free, confidential and independent advice on how to deal with debt problems,” he advised.
Source: http://www.creditchoices.co.uk/
