Scottish personal insolvencies fall by 8%

Latest Accountant in Bankruptcy data has shown that personal insolvencies in Scotland decreased by 8% to 1,780 in 2025-26 Quarter 2 (Q1), down from 1,935 in Q1 and a decrease of 113 (6%) compared with 2024-25 Q2.

There was a significant reduction in the number of Protected Trust Deeds (PTD) and a small reduction in Debt Arrangement Schemes (DAS), however there were 724 bankruptcies awarded in 2025-26 Q2, an increase of 27.9% compared with 2024-25 Q2.

Commenting on the latest insolvency stats, Emma Widdowson, chair of R3 in Scotland and legal director at Addleshaw Goddard, said “Whilst it’s good to see a slight overall decrease in today’s corporate and personal insolvency figures from Accountant in Bankruptcy (AiB), the executive agency of the Scottish Government, there has been an increase in creditor enforcement. For personal insolvencies, this could also explain the sharp rise in bankruptcy applications compared to the decrease in alternative debt relief measures such as PTDs and DASs.

“Whilst there has been an overall decrease in individual insolvency, it is clear that widespread increases in essential bills have placed significant pressure on household budgets. The increase in unavoidable costs, such as energy, food and fuel, leaves little room for flexibility in a debt relief option for an already tight household budget such that bankruptcy has become the more used option this quarter. As a result, there is growing concern that over the Christmas period more people may be turning to credit to cover basic expenses, increasing the risk of unsustainable debt levels and yet more creditor pressures driving bankruptcies.

“Housing costs are also contributing to financial stress. The removal of the Scottish rent cap in March has led to rising rental prices, with the average monthly rent now sitting at £1,140, according to Rightmove. At the same time, homeownership is becoming increasingly out of reach for many, as house prices continue to climb and mortgage repayments remain high due to elevated interest rates.

“Taken together, this forms a continued strain across both the corporate and personal sectors. Businesses are grappling with a complex mix of financial and operational challenges, while individuals are facing more pressure on their personal finances.

“As always, our message remains clear: businesses or individuals experiencing financial distress should seek expert advice from a regulated professional as early as possible. Early intervention provides more options to engage with creditors and more time to make a considered decision about how to best move forward.”