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Rise in Scottish personal insolvencies ahead of fee change 25 July 2012

Scottish personal insolvencies have risen in the first quarter of 2012 to 2013 by 14.9% ahead of a change in costs.

Official statistics from Accountant in Bankruptcy (AiB), Scotland’s Insolvency Service, show what it calls an “expected increase” in personal insolvencies of from the previous quarter with 5,601 personal insolvencies taking place.

According to the AiB the rise is mainly due to a surge in applications during May in advance of fee increases.

The charges are being upped to bring prices in line with actual costs for services, which came into effect from 1 June.

This is apparent through the specific increase in bankruptcies by debtor application, which have increased by 36.1 per cent.

Data on corporate insolvencies show that there were 420 notices of Scottish registered companies becoming insolvent or entering receivership – an increase of 9.1% compared to the previous quarter.

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.

Alan McIntosh legal and money advice training manager at debt advisors Carrington Dean said: “This is a see no evil, hear no evil policy the minister is pursuing and its destined to fail, causing much misery before it does so.

“The decision to increase the debtor application fee for bankruptcy by 100% across the board is a decision which we will come to regret.”

 

 

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