Accountancy firm BDO has predicted that as many as 40 people could go bankrupt every day in Scotland during 2014.
The firm expects approximately 15,000 Scottish people will be sequestered (the Scottish equivalent of bankruptcy) or take out a Protected Trust Deed (PTD) over the next 12 months.
Bryan Jackson, restructuring partner at BDO, believes past debts will undermine the efforts of Scots to stay out of bankruptcy.
He explained: “There are signs that the economy is beginning to recover and the six year period in the economic doldrums is coming to an end.
“However, for many individuals debts which were accumulated years ago continue to plague them and they are extremely susceptible to any changes in their personal circumstances.
“A reduction in overtime payments or increases in living costs can tip these individuals over the edge. They may then use payday loans to cover themselves in the short term but the debts will simply accumulate and eventually they will be made bankrupt.”
The combination of rising utility bills, increasing food costs and a freeze on wages has meant many Scottish people are only able to pay off interest on their debts, instead of paying them off entirely.
Bryan said: “Although the number of Scots being made bankrupt has reduced in the last few years from a peak of 23,500 in 2009 it has settled at a disturbingly high level.
“Prior to 2008 a figure of 15,000 Scots a year being bankrupted would have seemed outrageous but we have got used to a very high level of personal insolvency since the recession began and seem to accept these numbers as the inevitable consequence of the economic downturn.
“Worryingly many businesses are in a similar situation simply paying interest on debts which are never reduced.
“A rise in interest rates, reduced income, or a change in the marketplace and these businesses will collapse. About 20 businesses a week will have gone bust during 2013 and I would expect a similar figure or perhaps even higher for the coming year.”