Scottish personal insolvencies increase 31%

Latest official figures published by the Accountant in Bankruptcy (AiB) have shown that there were 2,348 personal insolvencies (bankruptcies and protected trust deeds) in 2026-27 Q2, an increase of 559 (31.2%) compared with 2025-26 Quarter 2 (Q2), covering July-September 2026.

In the same Quarter there were 713 debtor applications for bankruptcy benefitted from the revised fee structure. Of these, 655 cases (91.9%) paid no fee. Under the Debt Arrangement Scheme (DAS), there were 1,485 Debt Payment Programmes (DPPs) approved in 2026-27 Q2, an increase of 10.7% compared with 1,341 in 2025-26 Q2. There were 1,245 moratorium applications granted in 2026-27 Q2, an increase of 31.2% compared with 2025-26 Q2.

Business insolvencies decreased from 298 in 2025-26 Quarter 2 to 250 in 2026-27 Quarter 2.

David Alexander, Head of Debt Recovery at Gilson Gray, said “The latest figures show a 16% fall in corporate insolvencies in Scotland compared with the same period last year, with reductions in both creditors’ voluntary and compulsory liquidations. While this is encouraging on the face of it, insolvency levels remain elevated compared with pre-pandemic figures, suggesting that financial pressures are far from easing for many businesses.

“Cash flow remains tight, with ongoing operating costs, historic borrowing and subdued consumer demand continuing to weigh on companies. The fall in insolvencies may reflect some businesses managing to hold on for longer, rather than a significant improvement in trading conditions. Creditors also remain focused on recovering outstanding debts, which can create further pressure across supply chains.

“Meanwhile, the 31% rise in personal insolvencies is concerning and suggests that financial difficulties are becoming more acute for households. There can also be a knock-on effect when businesses struggle, particularly for directors who have provided personal guarantees against company borrowing.

“Directors should not take too much comfort from a fall in the headline figures. Staying on top of cash flow, recovering outstanding debts wherever possible and seeking professional advice at the earliest signs of financial difficulty remain crucial to avoiding more serious problems further down the line.”