The number of people being declared insolvent was at its lowest level for a decade, according to the Insolvency Service show.
A total of 79,965 individual insolvencies were reported in 2015, a 19% decrease compared to 2014 and the lowest since 2005.
3,495 companies entered insolvency in the last quarter of 2015, 2.7% less than Q3 2015 and over 10% less than Q4 2014.
The continued fall in individual insolvencies was mainly driven by a decrease in individual voluntary arrangements (IVAs).
33,993 IVAs were reported in 2015, a 23% decrease from 2014.
The number of bankruptcies was the lowest since 1990 with a total of 15,767 bankruptcy orders in 2015, 22% lower than in 2014.
The number of debt relief orders decreased by 9% to 24,175.
Phillip Sykes, president of the insolvency professionals trade body R3 commented on the latest statistics:
“Continuing low inflation and a growing economy have helped people pay down or service debts. The return of real wage growth has put a big dent in insolvency numbers.
“Quarterly insolvency numbers have been boosted by October changes to debt relief orders, which have made the insolvency regime more accessible to people in financial trouble.”
Compulsory liquidations decreased to the lowest level since 1989 with 583 companies subjected to a compulsory winding-up order in Q4 2015.
2,484 businesses entered creditors voluntary liquidation in Q4 2015, a 1.2% decrease on the previous quarter and 3.0% lower compared to the same period in 2014.
350 businesses filed for administrations in 2015, while the liquidation rate in the 12 months ending to Q4 2015 was 0.44% of all active companies.
Mr Sykes said:
“The falling price of a barrel of oil has helped businesses to bring costs down. However, it is causing a considerable degree of difficulty for those in the sector.
“While many oil and gas businesses are currently undergoing a period of restructuring, if they are unable to cut costs sufficiently we may see a wave of insolvencies in the sector in future quarters particularly among the smaller firms.”