Scottish personal insolvencies increase by 2%

Latest figures from Accountant in Bankruptcy (AiB) have revealed that personal insolvencies increased by 2% for Quarter 3 (Q3) 2023-2024  compared with Q3 2022-2023, to a total of 2,014.

The number of personal insolvencies (bankruptcies and protected trust deeds) in Scotland for Q3 2023-2024 decreased by 3.3% compared to the previous quarter’s total of 2,082 (July-September 2023).

Richard Bathgate, Scotland Chair of R3, the UK’s insolvency and restructuring trade body, said “Turning to personal insolvencies, the year-on-year increase has been driven by a rise in all forms of personal insolvency process.”

“Bankruptcy numbers have risen to a four-year high but are still much lower than they were pre-pandemic which suggests that support measures during Covid and beyond have kept individuals in Scotland from seeking out a formal personal insolvency solution for high levels of debt.

“While historically the Christmas period has been a lifeline for businesses, it can be the final blow to people that are grappling with already over-stretched finances. After two years of heightened inflation, many people in Scotland have relied on credit to fund the festive period, while some may still be paying off debt from Christmases past.

“On top of this, consistently high interest rates also mean that the cost of existing debt is only going up, creating a vicious and unsustainable cycle for people struggling with debt, which could translate into a surge in personal insolvencies this coming year.

“When money worries arise, it’s natural for both individuals and business owners to feel the weight of their challenges and be hesitant to seek help. However, avoiding the issue won’t make it go away – instead, it tends to make matters worse.”