Personal insolvencies increase in Scotland

Written by Oliver Wade

The latest statistics from Accountant in Bankruptcy (AiB) for the first quarter of 2018/19 revealed that total personal insolvencies, including bankruptcy and protected trust deeds (PTDs), increased by 11.8% when compared to the same period for 2017/18 in Scotland.

However, the report found that bankruptcy awards are down 6.5% compared to last year with 1,236 awarded for the first quarter of 2018/19 (1 April to 30 June). There was a significant increase in PTDs, with 1,972 PTDs protected in the first quarter of 2018/19, up from the 1,547 protected in the same period last year.

Furthermore, the Scottish government’s Debt Arrangement Scheme (DAS), which allows people to take control of their finances and repay their debts without facing insolvency or further action being taken against them, also experienced an increase of 8.5% compared to the same quarter 12 months ago. In the first quarter of 2018/19, there were 648 debt payment programmes approved under DAS, compared to 597 in the first quarter of 2017/18.

A total of £9.5m was repaid through the scheme in the quarter, slightly higher than the £9.4m reported in the previous year.

Commenting on the findings, AiB chief executive Richard Dennis said: “While the number of individuals entering insolvency continues to be very much lower than 10 years ago, these figures clearly illustrate personal insolvencies remain on an upward trend from the first quarter of 2015-16.

“With consumer borrowing now surpassing the levels seen before the 2008 crash, we are leading an ambitious programme of reform to make sure the debt solutions offered by the Scottish Government remain relevant in today’s society.

“In particular, changes expected to come into force this October will make the Debt Arrangement Scheme a much more accessible and flexible option for some people who otherwise may see no alternative other than insolvency.”

The volume of Scottish corporate insolvencies increased during the quarter, rising to 245 from the 200 recorded last year. This figure was composed of three receiverships, 145 compulsory liquidations and 97 creditors’ voluntary liquidations.

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