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Slight fall in Scottish insolvencies

The number of people entering insolvency in Scotland has actually fallen over the last year, although only slightly.

The Accountant in Bankruptcy (AiB), Scotland`s Insolvency Service, has just published its latest figures, showing us how many people entered insolvency to tackle their debts between April and June this year.

In all, there were 5,319 personal insolvencies in Scotland. Although this was a 25% increase on the number seen in the previous quarter, it also marked a 1% decrease on the same time period a year ago.

The personal insolvency figures tell us how many people entered bankruptcy or a Protected Trust Deed (generally regarded as the Scottish equivalent of an IVA - Individual Voluntary Arrangement).

The AiB also provides figures about DAS, the Debt Arrangement Scheme, which can give struggling Scottish borrowers access to a form of statutory debt management.

In all, there were 2,947 bankruptcies - an increase of 10% on the previous quarter but a decrease of 6% on the same time period last year. 2,459 of them were the result of debtor applications (where people apply to have themselves made bankrupt, as opposed to their lenders doing it).

• 1,305 of these were awarded through LILA, the Low Income, Low Asset route into bankruptcy, which was introduced in April 2008.
• 759 people entered bankruptcy through the Certificate route into bankruptcy, which was introduced in November last year.

As for Protected Trust Deeds, there were 2,372 new cases in the three-month period. Again, this was a significant increase (51%) on the previous quarter - but in this case, it was also an increase (of 6%) on the same period last year.

Finally, 643 new Debt Payment Programmes were approved under DAS. This was an increase of 35% on the first three months of 2011 - and an increase of 30% on the same time last year.

Fergus Ewing, who`s the Minister with responsibility for personal insolvency and debt management in Scotland, commented on the increase in DAS cases:

"AiB`s work to raise awareness of the Debt Arrangement Scheme and its benefits - such as the freezing of interest and charges for debtors and at least a 90 per cent return for creditors - has been reflected in the increase in take-up of the Scheme. With more people now accessing DAS, figures suggest it is offering a sensible option to Scots struggling with debt who have sought advice early on. With the changes introduced on 1 July, I fully expect to see continued growth in DAS in coming months."