Scottish personal insolvencies up 17 per cent but corporate numbers fall

There were 1,289 bankruptcies awarded during the quarter, the data showed, a 11 per cent increase on the same quarter in 2016-17, and the number of PTDs increased by 23 per cent to 1,550 over the same period.

Also revealed were 597 debt payment programmes (DPPs) approved under the Debt Arrangement Scheme (DAS) compared with 511 in the same quarter of 2016-17.

A total of £9.4 million was repaid through DAS during this quarter, a 1.1 per cent increase on the quarter in the previous year.

Tim Cooper, Chair of R3 in Scotland, the insolvency trade body, said: “Personal insolvencies are continuing the rising trend seen over the past two years.

“As Scotland’s unemployment rate is at a 25-year low, the rise is perhaps a little counter-intuitive. But looking beyond the headline unemployment rate, the number of economically inactive people in Scotland has risen since 2016, meaning that more people are on fixed incomes, and thus on the whole more exposed to higher inflation.

“The supply of consumer credit is – at the moment – fairly plentiful; but should this situation change, and credit become more expensive and harder to obtain, we might see a further rise in personal insolvencies.

“Research by R3 and ComRes found that 64 per cent of Scottish adults are not at all worried about their current level of debt, higher than the average for all British adults of 59 per cent. However, 43 per cent of Scottish adults say they often or sometimes struggle to make it to payday, which is three percentage points higher than the average for all British adults.

“Anyone struggling with their finances should seek information and support from a licenced professional as early as possible.”

The number of Scottish registered companies becoming insolvent or entering receivership decreased, meanwhile, in the first quarter of 2017-18, with 200 companies becoming insolvent compared with 265 in 2016-17 Q1.

The number of members’ voluntary liquidations (solvent liquidations) also decreased from 220 to 151 over the same period.

Also published were final statistics for 2016-17, which showed personal insolvencies in Scotland increased by 1,558 or 18 per cent to 10,032 in 2016-17 when compared with 2015-16.

Personal insolvencies increased in 2016-17 but were at the second lowest level since 2005-06, over the same period.

And there were 2,233 Debt Payment Programmes approved under DAS in 2016-17, 190 more than a year earlier.

In 2016-17, £37.3 million was repaid from debtors under DAS, similar to the £38.0 million repaid in 2016-17. Through DAS, creditors receive a minimum of 90 per cent of the debt owed to them from debtors (after DAS Administrator and payment distributor fees).

There were 846 corporate insolvencies in Scotland in 2016-17, 56 fewer than a year earlier.