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The Analysis Comment


Figures show Scottish insolvencies on the rise


Official statistics show a modest growth in both personal and corporate figures


Jamie Hepburn Minister for business, fair work and skills, Scottish Government


The latest statistics from Accountant in Bankruptcy show awards of bankruptcy have remained largely static compared to the same period a year ago. The 1,150 bankruptcy awards for the


second quarter of 2018-2019, covering the period from 1 July to 30 September 2018, are almost identical to the 1,146 awarded in the same quarter for 2017-2018, showing a mere 0.3% rise.


Personal rise However, total personal insolvencies, which include both bankruptcies and protected trust deeds, rose by 23% from 2,493 in the second quarter of 2017-2018 to 3,067, driven by an increase in deeds. There were 3,067 protected trust deeds in


the second quarter of 2018-2019, which was nevertheless down from the 3,218 recorded in the first quarter of the year.


significantly lower than 10 years ago, but we cannot take the issue of unsustainable personal debt lightly. The figures indicate that heavily marketed


trust deeds are contributing significantly towards the rise in total personal insolvencies. Our absolute priority is to ensure that people struggling with debt receive the right advice and are offered the most appropriate solutions. That is why we will continue to consider


whether the most financially vulnerable in society are made aware of the choices open to them, and if future legislative action is required. We are clear that insolvency should be an


We are clear that insolvency should be an option of last resort and we will continue to consult on and review legislation to make sure


Debt Arrangement Scheme The Scottish government’s pioneering Debt Arrangement Scheme, which allows people to take control of their finances and repay their debts without facing insolvency or further action being taken against them, was also largely static, with 638 debt payment programmes awarded under the Debt Arrangement Scheme for the quarter, compared to 662 in the same quarter for 2017-2018. A total of £9.2m was repaid through the scheme in the quarter,


narrowly down from the £9.4m in the same quarter a year ago. The number of individuals entering insolvency continues to be


12


debt relief and debt- management products remain fit for purpose


the statutory


option of last resort and we will continue to consult on and review legislation to make sure the statutory debt relief and debt- management products remain fit for purpose.


Corporate insolvencies Also, the number of Scottish corporate insolvencies rose very slightly during the quarter from the same period a year ago. There were 232 total corporate insolvencies during the quarter, up just eight from the 224 recorded in the second quarter of


2017-2018. This number was composed of 128 compulsory liquidations and 104 creditors’ voluntary liquidations. There were no receiverships recorded during the quarter. Nevertheless, the 232 recorded during the second quarter of


2018-2019 is down on the 245 reported in the first quarter of the year. CCR


www.CCRMagazine.com December 2018


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