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Scottish personal insolvencies fall nearly a third 26 October 2012

The number of Scottish personal insolvencies declined 27.5% in the second quarter of 2012 to 2013 compared to the previous three months.

Statistics from Accountant in Bankruptcy (AiB), Scotland’s Insolvency Service showed that personal insolvencies were also down 24.5% compared to the same period the previous year.

The organisation attributed the fall to a reduced number of bankruptcies by debtor application, which have dropped to just under half of their level in the previous quarter and by 38.7% against the second quarter of 2011 to 2012.

Fergus Ewing, minister for energy, enterprise and tourism, who has responsibility for personal insolvency and debt management in Scotland, said: “The drop in personal bankruptcies for this quarter is expected – there was a surge of applications last quarter for debtors applying for their own bankruptcy, prior to a necessary fee increase in June.”

The Debt Arrangement Scheme (DAS), a debt management tool that freezes interest and helps those individuals struggling to pay back debt, saw the numbers taking up the scheme increase nearly 30% from the same period last year.

While the number of debt payment programmes approved under the scheme were down 24.9% on the previous three-month period, it is higher than in any quarter of the previous year and showed a 29.7% increase on a year earlier.

Ewing added: “The Scottish government and its agencies continue to look at ways to help individuals struggling to break the cycle of debt.

“Through its work on bankruptcy law reform, AiB is in the process of determining how debt management and debt relief mechanisms can be further modernised to ensure that relevant and proportionate options are available.”

Data on corporate insolvencies revealed that there were 274 notices of Scottish registered companies becoming insolvent or entering receivership in the second quarter of 2012 to 2013, a decrease of 34.8% on the previous quarter and 24.1% lower than a year ago.

 

 

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