Personal insolvencies in Scotland decrease

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The number of personal insolvencies in Scotland continue to decrease while uptake of the Debt Arrangement Scheme (DAS) has increased.
 
Accountant in Bankruptcy (AiB) today released official statistics reporting personal and company insolvencies in Scotland for the first quarter of 2014-15. The figures show that personal insolvencies fell by more than a quarter on the same period of the previous year. A total of 2,968 were recorded during this period which is the lowest recorded total since the first quarter of 2005-06.
 
The number of protected trust deeds (PTDs) recorded fell to its lowest quarterly total since DAS was introduced in 2004. The total recorded this quarter was 40.5 per cent lower than the corresponding quarter of the previous year.
 
The number choosing to enter the statutory debt management solution, DAS, increased as 1,261 were approved which is above the level of PTDs for the first time. A total of £8.6 million was repaid through this Scheme in the first quarter of 2014-15.
 
The overall demand for statutory debt solutions in Scotland continues to decline and at an increasing rate. The combined number of bankruptcies awarded, PTDs registered and DAS applications approved totalled 4,229 this quarter which is 18.7 per cent lower than the corresponding quarter of the previous year.
 
The number of Scottish registered companies becoming insolvent or entering receivership increased for the second successive quarter, this time by 2.5 per cent from the last quarter. This increase equates to an additional six companies. This quarter’s total was also 35.9 per cent higher than the same quarter of the previous year.
 
The figures released today were produced by independent statistical staff free from any political interference, in accordance with professional standards set out in the Code of Practice for Official Statistics.
 

Background

  • A full statement of Scottish insolvency statistics for the first quarter of 2014-15 is available.
     
  • Accountant in Bankruptcy supervises all personal insolvencies in Scotland and administers those bankruptcies where appointed. Insolvent individuals in Scotland are subject to bankruptcy (sequestration) or enter protected trust deeds (PTDs) under the Bankruptcy (Scotland) Act 1985. The 1985 Act was amended by the Bankruptcy (Scotland) Act 1993 and on 1 April 2008, part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 came into force making significant changes to some aspects of bankruptcy in Scotland. Changes included the introduction of LILA, a route into bankruptcy for people with low income and low assets. The changes also took a number of processes out of the Scottish Court system, reducing costs and freeing up court time.
     
  • Protected trust deeds (PTDs) are voluntary arrangements, where the debtor passes their estate to an insolvency practitioner who arranges to repay part of the debt to creditors on the debtor’s behalf. This is similar to Individual Voluntary Agreements (IVAs) in England and Wales, although there are important differences in the way they are set up and administered.
     
  • The Debt Arrangement Scheme (DAS) is administered by Accountant in Bankruptcy. Debt payment programmes approved under DAS allow individuals to repay their debts in full over an extended period of time whilst providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. Further information on DAS, including a register of debt payment programmes, is available on the DAS website.
     
  • Details of bankruptcies, PTDs, liquidations and receiverships are found on the Register of Insolvencies, which is maintained by Accountant in Bankruptcy.
     
  • Accountant in Bankruptcy is also responsible for receiving, extracting and recording information from certain forms relating to company liquidations and receiverships. The legislation appropriate to liquidations and receiverships is contained in the Insolvency Act 1986 and the Insolvency (Scotland) Rules 1986.
     
  • Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy’s website.