Scottish personal insolvencies declined in first quarter of the year

New official figures published by Accountant in Bankruptcy (AiB) show a marked deterioration in both personal and corporate financial distress across Scotland in the first quarter of 2026, with insolvencies rising significantly compared with the same period a year ago.

There were 2,003 personal insolvencies, encompassing bankruptcies and protected trust deeds, in the January to March 2026 quarter, an increase of 332, or 19.9%, compared with the same quarter of the previous year.

Bankruptcies alone rose by 23.1%, with debtor applications increasing by 33.7% to 591 cases. The majority of those awards continue to be made through the Minimal Asset Process (MAP), which accounted for 64.5% of debtor application bankruptcies during the quarter.

The revised fee structure also played a notable role, with 542 of the 591 debtor applicants – some 91.7% – paying no application fee at all. Meanwhile, Protected Trust Deeds (PTDs) registered increased by 18.1% compared with the same quarter last year, reaching 1,273 registrations.

Moratorium applications, which provide individuals with temporary breathing space from creditor enforcement, rose by 15.5% year-on-year to 1,094 in the quarter.
On the corporate side, the picture was equally concerning. Corporate insolvencies rose from 294 in the same quarter of 2024-25 to 375 in 2025-26 Q4, an increase of 27.6%. Creditors’ voluntary liquidations rose by 23.4%, whilst compulsory liquidations climbed from 127 to 169.

Under the Debt Arrangement Scheme (DAS), 1,257 Debt Payment Programmes were approved in the quarter, a modest rise of 2.9% compared with the previous year, with around £18.1 million repaid by debtors.

David Alexander, Head of Debt Recovery at Gilson Gray, sai: “The latest figures point to a clear increase in both personal and corporate insolvencies across Scotland, with rises of around 20% and 28% respectively compared with the same period last year. That reflects the continued pressure we are seeing on the ground, as higher borrowing costs, ongoing repayments from pandemic-era support, and wider cost pressures continue to weigh on both households and businesses.

“On the personal side, the increase in bankruptcies and protected trust deeds, alongside a notable rise in moratorium applications, suggests more individuals are reaching the point where they need formal breathing space or structured solutions to manage their debts. The revised fee structure is also likely playing a role in making bankruptcy more accessible, particularly through the Minimal Asset Process, which continues to account for the majority of cases.

“For businesses, the rise in corporate insolvencies – particularly in creditors’ voluntary and compulsory liquidations – indicates that financial distress is becoming more acute. We are seeing creditors take a more active approach to recovery, and that has a knock-on effect across supply chains. While members’ voluntary liquidations have also increased, which can reflect solvent closures, the broader picture still points to challenging trading conditions.

“Overall, these figures underline that financial pressures have not eased. If anything, they are becoming more entrenched. Whether for individuals or directors, early engagement and taking advice at the first signs of difficulty remains crucial to managing debt and avoiding more serious outcomes further down the line.”