Scottish personal insolvencies decrease

New data from Account in Bankrupcy (AiB) has revealed a quarterly and yearly fall in Scottish personal insolvencies.

Overall there were 1,966 personal insolvencies (bankruptcies and protected trust deeds (PTDs)) in 2022-23 Q3. This is a decrease of 4.9% when compared with 2021-22 Q3.

The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland for Q3 2022-2023 decreased by 5.2% compared with the previous quarter (July-September 2022).

In 2022-23 Q3, 490 debtor applications for bankruptcy benefitted from the revised fee structure. Of these, 352 cases (71.8%) paid no fee at all.

Under the Debt Arrangement Scheme (DAS), there were 1,309 Debt Payment Programmes (DPPs) approved in 2022-23 Q3. This is compared with 1,102 for the same quarter from 2021-22, an increase of 18.8%. There were 785 applications for moratoria granted in 2022-23 Q3, an increase of 6.2% when compared to the same quarter in 2021-22.

Commenting on the Scottish Insolvency Statistics, Richard Bathgate, Chair of insolvency and restructuring trade body R3 in Scotland and Restructuring Partner at Johnston Carmichael, said “When it comes to personal insolvency, the quarterly and yearly fall has been driven by a drop in all forms of personal insolvency processes – with bankruptcies falling 10% from Q3 last year.”

“This suggests that the cost-of-living crisis has yet to translate into an increase in personal insolvencies, but despite the fall in numbers, rising food prices, rent and mortgage costs are still huge pain points for people in Scotland who are finding themselves paying significantly more each month on just the everyday essentials.”

“Prices at the pump are starting to come down, but consumers are still battling against sky-rocketing household energy bills – an issue which is only set to get worse in March when the energy support scheme comes to an end.”

“The true impact of rising interest rates on mortgage payments remains something of an unknown but is likely to add to household woes as existing mortgage products come to an end forcing customers onto products with higher rates.”

“There’s a real danger that people will begin to turn to credit options to cover these rising cost pressures, and that we’ll see more and more people driven into problem debt, and more vulnerable to the kind of unexpected shocks that can lead them to become insolvent.”

Summary of the latest Scottish Statutory Debt Solutions Statistics 

Financial quarter	2021-22 Q1	2021-22 Q2	2021-22 Q3	2021-22 Q4	2022-23 Q1	2022-23 Q2	2022-23 Q3	2022-23 Q4	Q3 vs Q3 change
Bankruptcies	586	527	638	554	591	594	574	[x]	-10.0%
Protected trust deeds	1,298	1,394	1,429	1,343	1,451	1,480	1,392	[x]	-2.6%
Total personal insolvencies	1,884	1,921	2,067	1,897	2,042	2,074	1,966	[x]	-4.9%
Approved DPP under DAS	1,209	1,138	1,102	1,040	1,182	1,251	1,309	[x]	18.8%
Amount repaid under DAS (£ million)	10.8	10.7	11.0	11.3	11.3	12.3	11.5	[x]	4.7%
Moratoria on diligence granted	753	947	739	726	722	879	785	[x]	6.2%
Total corporate insolvencies	163	211	240	240	244	270	272	[x]	13.3%