"The calm before the storm" was how one commentator described today's drop in personal insolvencies. That's only the half of it.

It's certainly a good thing, taken in isolation, that the number of personal insolvencies dipped from 26,869 in the second quarter to 26,079 in the third. But the detail of the figures shows something more alarming.

A person facing bankruptcy is like someone on a small boat which has sprung a leak. There is a bucket to help you deal with the problem, known as an individual voluntary arrangement (IVA), a form of insolvency which avoids bankruptcy and enables you to manage your debts in co-ordination with your lenders.

The problem is, as evidenced by the number of firms brokering IVAs that have issued profits warnings, such deals are in decline. To continue our metaphor, the bucket has got a hole in it too.

What happens now? In the short term, we're using less of the bucket - the number of IVAs being issued fell by 14 per cent over the past year, and that's more than balancing out a 2 per cent rise in bankruptcies.

But the boat is now sinking fast for those in financial distress and their filing for bankrupcy is only a matter of time, which is why there is still so much gloom hanging over these figures.

And then there's that storm coming. Worse, of course, will be the aftermath of the credit crunch, which has already pushed up sharply the mortgage rates for borrowers with adverse credit records, precisely the people most likely to get into financial distress.

In addition, the five interest rate rises since August 2006, which has only had a marginal impact on the figures so far, will take its full toll over the coming year.

Those at risk need to make sure they have a pretty good lifejacket.

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