Accountant in Bankruptcy (AiB) has released official statistics reporting personal insolvencies in Scotland for the second quarter (July to September 2019) of 2019-20. The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland fell by 1.7% in July-September 2019 compared with the previous quarter (April-June 2019), but rose by 12.6% compared with the same quarter the previous year (July-September 2018).

There were 3,466 personal insolvencies (bankruptcies and protected trust deeds (PTDs)) in Scotland in 2019-20 Q2, more than the 3,077 personal insolvencies in the same quarter in the previous financial year (2018-19 Q2). 178 bankruptcies were awarded during this quarter – a 1.6% increase on the same quarter in 2018-19. PTDs increased by 19.4% to 2,288 over the same period.

There were 751 debt payment programmes (DPPs) approved under the Debt Arrangement Scheme (DAS) compared with 636 in the same quarter of 2018-19.

A total of around £9.0 million was repaid through DAS during this quarter, a decrease of 2.0%, compared with the £9.2 million repaid in the same quarter of 2018-19.

Commenting on the Scottish Insolvency Statistics, Tim Cooper, Chair of R3 in Scotland, the insolvency and restructuring trade body said “The small quarterly fall in personal insolvencies (bankruptcies and protected trust deeds) is the first quarter-on-quarter reduction since this time last year and is not enough by itself to provide conclusive proof that the personal insolvency tide has turned, especially since the comparison with the same quarter last year is so stark.”

“The reduction in personal insolvency numbers has taken place against a small rise in unemployment, although employment levels are still very high by historic levels. But once more, we would question whether the raw proportion of people in jobs – a very binary measure – tells the full story, as people may not be getting all the hours they want, for example.”

“No-one can afford complacency, however, as the level of outstanding consumer debt continues to grow, albeit less rapidly than in the past. The interest on many credit cards is going up at the same time, indicating that financial services companies may be getting more nervous about consumers’ ability to repay. The troubles seen in the casual dining and retail sectors are more signs that people’s budgets are feeling the pinch.”

“The price of fuel has tended to be higher in many parts of Scotland than in the UK overall, which is a double blow for many people who rely on their cars to get them to work, especially in rural areas, and pump prices stayed relatively high but fairly flat over the quarter in question, having risen sharply since January.”

“A single piece of bad luck – a broken down car, a lost job, the end of a relationship, the need to seek new accommodation – can be enough to make someone’s finances spin out of control. Anyone who can see trouble on the horizon should seek free and reliable debt advice from a regulated and professional source at the soonest possible instance, to stop problems from spiralling further.”