I think you have bigger problems than folds here...it is nearly impossible for my eyes to separate the figure from the background currently. It is a VERY flat composition without any thought given to how to draw the viewer's eye to any particular part of the painting. The trees especially have very similar silhouettes and contrast levels, and your figure gets lost in them very easily. IMO if you stick with the first version and just work on the composition you will have a very strong piece, regardless of imperfections in your clothing studies.