Personal insolvencies declined by 1.2% in the first three months of this year compared with the previous quarter, the Insolvency Service said today.
There were 28,723 personal insolvencies in England and Wales in the first quarter of 2012, which was also a 4.7% drop on the same period a year ago.
But within these figures, the year-long decline in the number of people being declared bankrupt came to an end, as bankruptcies rose by 5.5% on the previous quarter to reach 9,132, despite remaining 27.2% lower than this time last year.
The number of debt relief orders (DROs), another form of personal insolvency often dubbed "bankruptcy light", rose by 7.3% on the quarter to reach a record high of 7,897.
DROs were introduced in spring 2009 and are aimed at people who have more modest levels of debt but no realistic prospect of paying it off. Around one in four people taking out a DRO is aged between 25 and 34.
The overall decrease in the personal insolvency figures was caused by a sharp decline in individual voluntary arrangements (IVAs), which dropped by 10.4% on the quarter to reach 11,694.
The number of companies insolvent in England and Wales in the first three months of the year rose by 10% on the previous quarter.
Some 1,290 firms had receivers or administrators appointed, compared with 1,173 in the final three months of last year.
Ian Gould, head of corporate recovery and insolvency at PKF accountants, said: "The statistics don't currently reflect the difficulties facing the corporate sector and I'd expect to see a significant increase in business failures at some point during the next 12 months or so."
Continued low interest rates meant that personal bankruptcies fell sharply last year, dropping by almost a third in 2011 on a year earlier and hitting their lowest levels since 2004.
The last time bankruptcies saw a rise on the previous quarter was in the first three months of last year, when 12,539 were recorded.
The Insolvency Service suggested that the rise in DROs and bankruptcies could have been caused by a recent change in the law which makes it possible for money built up in a pension to be accessed to pay off bankruptcy debts.
Despite today's slight drop in the overall personal insolvency figures, insolvency rates in this category have been generally rising since 2004.
Louise Brittain, a partner in Deloitte's contentious insolvency team, said the figures did not reflect the "crippling financial difficulty" being felt by households.
She said small business-owners were likely to have formed a significant part of the bankruptcy increases, as they will have had greater difficulty trying to obtain credit in the tough economic environment.
The percentage of bankruptcy orders involving trading debts, meaning bankruptcies where people were self-employed, was 22% in the fourth quarter of 2011, the latest period for which the figures are available. The Insolvency Service said it was a higher percentage than during the previous few years.
Highlighting the drop in IVA figures, Ms Brittain said: "This is due to a large number of individuals simply not having the assets to offer their creditors.
"With price inflation continuing to outstrip wage inflation, household budgets will continue to be squeezed.
"The decision by several mortgage lenders to tighten their lending criteria will put added financial pressure on homeowners."
Debt charity the Consumer Credit Counselling Service (CCCS) said it expects to see personal insolvencies rise over the next year and warned that six million households are still living on the edge.
Delroy Corinaldi, director of external affairs at the CCCS, said: "With over six million households remaining financially vulnerable, a range of factors such as high inflation, redundancy, and the impact of the welfare benefit changes, are likely to fuel a rise in personal insolvencies over the next year.
"It is crucial that anyone who is struggling to repay their debts, or even worried about their debts, should seek free advice and support."