Scotland Sees Rise in Number of Insolvencies
Official figures released by Accountant in Bankruptcy (AiB) last week report 5,601 personal insolvencies in Scotland in the first quarter of 2012/13 – a 14.9 per cent increase on the previous quarter and a 5.3 per cent increase on the same period in the previous year.
In total there were 3,310 awards of bankruptcy, showing an increase of 26 per cent on the previous quarter and a 12.3 per cent increase on the same period from the previous year.
Changes to AiB’s fees structure were introduced via the Bankruptcy Fees etc. (Scotland) Regulations 2012 which came into effect (in part) on 1 June 2012, including an increase in the fee for debtors applying for their own bankruptcy, may account for some of this increase: high numbers of debtors applied for bankruptcy in May, before the change, leading to a 36.1 per cent increase in bankruptcies by debtor application for the quarter. The number of ‘Protected Trust Deeds’ (PTDs) recorded was 2,291 in total, an increase of 2.0 per cent on the previous quarter and a decrease of 3.4 per cent on the corresponding quarter of last year.
Figures for the Debt Arrangement Scheme (DAS) show that the number of ‘debt payment programmes’ approved under the Scheme have increased again this quarter, to 1,478, showing an increase of 56.9 per cent compared to the previous quarter and an increase of 129.9 per cent compared to the same period of last year. Improvements made to DAS last year along with the promotion of the Scheme have helped to raise awareness of the Scottish Government-backed debt management tool and its benefits.
AiB received 420 notices of Scottish registered companies becoming insolvent or entering receivership in the first quarter of 2012/13 – a 9.1 per cent increase on the previous quarter and a 22.4 per cent increase on the same period in the previous year.
Commenting on the latest figures, Minister for Energy, Enterprise and Tourism, Fergus Ewing, said:
“The rise in bankruptcies, specifically applications for bankruptcy from debtors, can partly be attributed to a rush prior to 1 June before application fees increased. I fully expect this trend not to continue into the next quarter.”
“However, we must not be complacent and instead face up to the challenge that these difficult economic times place upon us. It is important that individuals in debt receive appropriate information, at the right time, which is focused on their own particular needs. The Scottish Government and our agencies continue to do all we can to strengthen economic growth.”