Personal insolvency figures show sharp increase
Personal and company insolvencies in Scotland showed a sharp upturn, both in the first quarter (April to June) of 2017-18 and final statistics for 2016-17, according to the latest figures from the Accountant in Baknruptcy.
In the quarter to June there were 2,839 personal insolvencies (bankruptcies and protected trust deeds (PTDs)), up from 2,420 in the same of quarter of 2016-17, an increase of 17%. Bankruptcies awarded rose by 11% to 1,289, while the number of PTDs jumped by 23% to 1,550 over the same period.
In addition, 597 debt payment programmes were approved under the Debt Arrangement Scheme (DAS), compared with 511 in the same quarter of 2016-17. The amount repaid through DAS during this quarter totalled £9.4m, only 1.1% more.
In the same quarter, however, the number of Scottish registered companies becoming insolvent or entering receivership fell to 200, compared with 265 in Q1 of 2016-17. The number of members’ voluntary liquidations (solvent liquidations) also fell, from 220 to 151.
Full year figures for 2016-17 show personal insolvencies in Scotland rising by by 1,558 to 10,032, or 18% higher when compared with 2015-16. However the figure was still the second lowest since 2005-06.
There were 2,233 debt payment programmes approved under DAS, 190 more than the previous year, and £37.3m was repaid under DAS, similar to the £38.0m repaid in 2015-16. Through DAS, creditors receive a minimum of 90% of the debt owed, after DAS administrator and payment distributor fees.
Corporate insolvencies in Scotland in 2016-17 totalled 846, 56 fewer than a year earlier.
Minister for Business, Innovation and Energy, Paul Wheelhouse MSP, commented: “On the personal insolvency front, there is no question that continuing austerity has led to incomes being squeezed and more people suffering the anxiety and distress of insolvency as a result. But it is nevertheless important we acknowledge that the longer term trend of people accessing statutory debt relief and debt management solutions is a declining one and numbers of people falling into insolvency are around half of the levels reported at the turn of the decade."