Figures released today show that personal insolvencies in Scotland have decreased in the second quarter of the 2013-14 financial year.

Official statistics from Accountant in Bankruptcy (AiB), Scotland’s Insolvency Service, show that personal insolvencies have decreased by 14.7 per cent on the previous quarter and by 16.1 per cent on the same quarter of the previous year.  Personal insolvency figures consist of the number of bankruptcies awarded and the number of protected trust deeds (PTDs) registered. There was a total of 3,411 personal insolvencies in the second quarter of 2013-14, with the longer term trend continuing to show a general decline since 2008-09. 

The Debt Arrangement Scheme (DAS), the Scottish Government’s debt management tool which allows people struggling with debt to pay back what they owe over a longer period, continues to be seen as a viable alternative to bankruptcy. The number of debt payment programmes approved under the Scheme remains high with 1,170 applications approved in this quarter, representing almost a four-fold increase since the equivalent quarter in 2009-10.  

Data on corporate insolvencies shows that the number of Scottish registered companies becoming insolvent or entering receivership increased for the second successive quarter. The total recorded was 45.7 per cent higher than the previous quarter, although when compared with the equivalent quarter of the previous year was 2.2 per cent lower. 

Minister for Energy, Enterprise and Tourism, Fergus Ewing, who has responsibility for personal insolvency and debt management in Scotland, commented on the recent figures: 

“I welcome the reduction in Scottish personal insolvencies this quarter despite the current financial climate. The Scottish Government and AiB have carried out a significant amount of work on policy and legislative reform this year with the aim of creating a Financial Health Service for Scotland. 

“Following our recent efforts to raise awareness of the DAS scheme and its benefits, there has been an increase in individuals opting for the Debt Arrangement Scheme with £7.2 million having been repaid through DAS this quarter. 

“The Scottish Government will continue to take action to provide the best possible debt solution services to help those people struggling with debt”. 

Background

• A full statement of Scottish insolvency statistics for the second quarter of 2013-14 is available. 
   
• Accountant in Bankruptcy (AiB) is an Executive Agency of the Scottish Government with responsibility for administering the process of personal bankruptcy. Further information regarding insolvency in Scotland, including legislation, can be found on this website.
   
• The Debt Arrangement Scheme (DAS) is administered by AiB. Debt payment programmes approved under DAS allow individuals to repay their debts in full over an extended period of time while providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. Further information on DAS is available on the DAS website.