The number of personal insolvencies in Scotland totalled 3,855 in the third quarter of 2012-13, the lowest quarterly figure since 2008, according to the latest figures.
Accountant in Bankruptcy (AiB), Scotland’s insolvency service, reported that personal insolvencies in Scotland declined for the second successive quarter in 2012-13 as more than 1,000 people opted for the debt arrangement scheme (DAS) as an alternative to bankruptcy.
AiB revealed that personal insolvencies decreased 5.1% in the three months to 31 December 2012 compared to the previous quarter and by 17.5% from the same quarter a year earlier.
The number of bankruptcies awarded in the third quarter fell 30.5% to 1,825 from 2,625 in the same period in 2011-12.
The DAS is the Scottish government’s debt management tool, which allows individuals struggling with debt to repay what they owe over a longer period.
Although the number of debt payment programmes approved under the scheme is down slightly by 3.9% from the previous quarter to 1,067, it is 21.5% higher than the 878 in the same quarter the previous year.
Fergus Ewing, the minister for energy, enterprise and tourism, said that while the reduction in bankruptcies is a “positive sign”, it is important not to be complacent.
“We must not forget that many Scottish families are still struggling with unmanageable debt and often the financial impact of Christmas is felt in January and February,” he added.
“The increase in individuals opting for the debt arrangement scheme (DAS) highlights that this remains a valuable alternative to bankruptcy, however work must continue to help the people of Scotland who are struggling to break free from the cycle of debt.”
Data on corporate insolvencies showed that there were 185 notices of Scottish registered companies becoming insolvent or entering receivership, a decrease of 32.5% from the second quarter and down 33.9% compared to the prior year.
Ewing said: “This is reassuring news for the Scottish economy. The Scottish government is taking direct action by investing in our infrastructure and maintaining the most competitive business environment anywhere in the UK.”
He confirmed that the government will bring forward a bill later this year for the provision of debt advice, debt management and debt relief within a financial health service, which aims to rehabilitate those in financial difficulty.