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Personal insolvency rates vary considerably across local areas of England and Wales but the reasons for this have barely been explored. This paper presents an empirical study of the factors determining variations in personal insolvency rates in 2006 utilising newly available data. The results suggest that a number of economic and demographic factors are important including income, social benefits, age, occupation, public-sector and armed forces employment and level of local entrepreneurship. Significant spatial autocorrelation is evident in the dataset and three sub-regional clusters of local authorities are identified; one in the South West is characterised by adjacent areas with a high insolvency rate and two others in Wales and the North West that are characterised by low insolvency rates. [ABSTRACT FROM AUTHOR]