It’s not all doom and gloom during the present economic difficulties. The Insolvency Service has released figures which show that the number of people declared bankrupt fell to a near five-year low during the third quarter of this year.

A total of 13,907 people in England and Wales went bankrupt during the three months to the end of September, the lowest level since the final quarter of 2005 and 24% down on the same period of 2009.

This fall is partially offset by a rise in the number of consumers taking out debt relief orders (DROs). DROs were introduced in 2009 and have continually increased in popularity. They are an alternative to bankruptcy for people with debts of less than £15,000, assets of less than £300 and less than £50 surplus income a month.

Despite this commentators warned that insolvency figures are expected to hit a record high this year, as the number of consumers unable to keep up with their debts is likely to remain elevated for the foreseeable future.

33,935 people have been declared insolvent in the last three months, well above the levels seen before the credit crunch struck.

Mark Sands, Head of Bankruptcy at RSM Tenon, said: “For a record sixth consecutive quarter, personal insolvencies have continued at hugely inflated levels.

“This is a trend that we expect to continue for a further 18 months as the full effects of Government spending cuts are felt.”

The number of companies going under also fell for the sixth consecutive quarter, but, insolvency practitioners have been quick to ensure that this news is also met with caution and warned that trading conditions remain tough.