Scottish personal insolvencies increase by 7%

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

Overall, personal insolvency numbers (bankruptcies and protected trust deeds) in Scotland for Quarter 2 2022-2023 increased by 7.7% compared with Quarter 2 2021-2022.

The number of personal insolvencies (bankruptcies and protected trust deeds) increased by 1.3% compared with the previous quarter (April-June 2022).

Commenting on the Scottish Insolvency Statistics, Iain Fraser, Chair of insolvency and restructuring trade body R3 Scottish Technical Committee, said “When it comes to personal insolvency, the quarterly increase has been driven by a rise in the number of protected trust deeds. The year-on-year increase has been driven by a rise in both protected trust deeds and bankruptcies.”

“The reality of the cost of living squeeze means more people are turning to insolvency processes to improve their financial situation. Amid soaring prices and recession fears, consumer confidence remains low. Most people are focusing their spending on the essentials like food and heating, with little left over for anything else.”

“On top of this, at the end of September the limit for pursuing sequestration was lowered to £5,000 which could see an increase in creditors pursuing debts using the bankruptcy process.”

“The new Scottish rent freeze brought in last month will go some way towards supporting people’s finances – rent prices in the country have risen almost 10% over the past year and are likely to see upward pressure as mortgage rates rise and landlords look to pass costs on to renters once the freeze is lifted, so whilst the freeze will provide some assurance for Scottish renters there is likely to be rent-rise shock in the pipeline.”