Scottish personal insolvencies rise by 1.8%

The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland rose by 1.8% to 1,918 in July-September 2021 compared with the 1,885 in April-June 2021, and was 8.4% higher than in July-September 2020 (1,770) according to latest Accountant in Bankruptcy (AiB) figures.

A total of 524 bankruptcies were awarded during this quarter – a 32.0% decrease on the same quarter in 2020-21.  PTDs increased by 39.5% to 1,394 over the same period.

In the second quarter of 2021-22, a total of 491 bankruptcy awards were made following applications submitted to AiB, all through the revised fee structure. Of this total, 365 (74.3%) applicants were not required to pay any fee at all.

There were 947 applications for moratoria granted in 2021-22 Q2.  This is 518 more than the figure of 429 granted in the same quarter in 2020-21.

There were 1,138 debt payment programmes (DPPs) under the Debt Arrangement Scheme (DAS) approved in 2021-22 Q2, compared with 756 approved in the same quarter of 2020-21, an increase of 50.5%.

A total of 452 approved DPPs under the DAS were completed in 2021-22 Q2 – a 15.0% decrease on the same quarter in 2020-21.  

There were 332 DPPs revoked in 2021-22 Q2.  This is 192 more than the figure of 140 revoked in the same quarter of 2020-21.

In 2021-22 Q2, around £10.6 million was repaid from debtors under the DAS compared with the £9.4 million repaid in 2020-21 Q2, an increase of 12.7%.

Commenting on the Scottish insolvency statistics for July-September 2021, Tim Cooper, Chair of insolvency and restructuring trade body R3 in Scotland and a Partner at Addleshaw Goddard, said

“When it comes to personal insolvency, the quarterly and annual increases have been driven by a rise in Protected Trust Deeds. This suggests that more people are working with their creditors to resolve and repay their debts, without reverting to bankruptcy – and is supported by the fact that bankruptcy numbers in Scotland fell compared to the previous quarter and this time last year.”

“It’s also worth noting that the number of people entering a moratorium in Scotland increased dramatically this quarter. This indicates that there’s been a significant rise in the number of people who are facing or approaching serious financial difficulty.”

“While this is concerning, there is a positive from this: more people are taking steps to identify their options, and doing this free from creditor action may give them the space to come to a more considered course of action for resolving their financial issues.”

“To anyone who is worried about their finances, our message is simple: seek advice – and do it at the first signs of trouble. Having a conversation about your money worries – whether they’re personal or business – is hard, but doing so as early as possible will give you more options for resolving your situation, more time to decide which of those is right for you, and a better chance of turning your situation around than if you’d waited and the problem had spiralled.”