There were 3,454 approved DPPs under the Debt Arrangement Scheme in the calendar year 2020 compared with 2,907 for the same period the year before, an increase of 18.8%.
The introduction of new provisions on the statutory moratorium and the revised fee structures in place for accessing bankruptcy are part of emergency measures brought in by both the Coronavirus (Scotland) Act 2020 and the Coronavirus (Scotland) (No.2) Act 2020.
As of 31st December 2020, 1,207 applications for moratoria had been granted under the new powers. In the period between 27th May and 31st December 2020, there were 1,435 new applications for bankruptcy that benefitted from the reduced application fee – 1,125 (78.4%) of which paid no application fee at all.
Commenting on the Scottish Insolvency Statistics Tim Cooper, Chair of R3 in Scotland, the insolvency and restructuring trade body, said “2020 was a year like no other in living memory. The pandemic upended many normal ways of living and doing business, and took a terrible toll on our communities.”
“On the personal insolvency side, the pandemic has caused unemployment numbers to rise, while the number of people claiming benefits almost doubled in November 2020 compared to November 2019, and this has shown up in the numbers, with a jump in bankruptcies and Protected Trust Deeds in the final quarter of 2020 compared with Q3. Mitigating this, however, are continuing low inflation rates, as well as Government support for many people’s incomes through the furlough scheme and support for self-employed people – although these are due to run out soon, leaving many facing a cliff’s edge in their finances.”
“It is more important than ever to get good, reliable, and trustworthy advice from a qualified and regulated source if your or your company’s finances are in trouble. Make sure to check the credentials of anyone offering unsolicited advice, as it is a sad fact that rogue advisors tend to pop up in greater numbers during times of turmoil. Getting solid, impartial advice from a reputable source at the earliest opportunity is vital.”