Drop in Scots accessing debt solutions

Provisional Accountant in Bankruptcy numbers for the fourth quarter of 2016-17 show a fall in bankruptcies and protected trust deeds

Fewer Scots have accessed statutory debt solutions according to the figures from Accountant in Bankruptcy (AiB) for the fourth quarter of 2016-17.

Compared with the third quarter of 2016-17, total personal insolvencies, which include bankruptcies and protected trust deeds, fell by 3.9%.

In the three months between 1 January and 31 March, bankruptcies fell by 0.4% to 1,112, while numbers of protected trust deeds recorded dropped by 6.6% to 1,401.

Approved debt payment programmes under the Scottish Government-backed Debt Arrangement Scheme rose very slightly from 529 in the previous quarter to 531. A total of £9.2 million was repaid through DAS this quarter, which is down from £9.6 million during the previous quarter.

Over 400 debtors paid off their debts in full through DAS, with 423 DAS debt payment programmes completed, up from 408 in the previous quarter and significantly more than the 328 completed in the same quarter a year ago.

DAS allows debtors to pay their debts in full without facing insolvency. By contrast, total personal insolvencies, which include both bankruptcies and protected trust deeds, totalled 2,513 for the fourth quarter of the year up to 31 March 2017, a 11% increase on the same quarter in 2015-16.

For the 2016-17 year as a whole, numbers of total personal insolvencies have risen by 18% - but remain the second lowest in the last decade. Partly this reflects the fact that numbers in 2015-16 were lower than usual as it took time for the system to adjust to the introduction of new legislation on 1 April 2015.

Personal insolvencies in Scotland have more than halved since 2008-09, and the numbers fell significantly in early 2015-16, the first months after the new legislation came into force.

Commenting on the latest figures, Minister for Business, Innovation and Energy, Paul Wheelhouse MSP, said: “The number of people falling into financial difficulty and having to seek debt relief has been falling steadily for some time‎.

“These figures are the second lowest since 2005/06 at which time award of bankruptcy was reserved to the courts. Since then, access to bankruptcy for those facing serious financial difficulty has been simplified greatly and in this context today's figures highlight the low levels of personal insolvency we have in Scotland‎. 

“While we know better than to read too much into a single quarter’s figures in isolation, it is heartening to see this quarter reflects the long term downward pattern.

“We recognise 2015-16 was an abnormally low one for personal insolvency and therefore it is important that work continues to protect the most financially vulnerable and prevent, where we can do so, people suffering the uncertainty and anxiety of financial distress.”

The number of Scottish businesses becoming insolvent or entering receivership fell from 903 for the whole of 2015-16 to 840 in 2016-17, a decline of 7.0%. Compared with the third quarter of 2016-17, total corporate insolvencies dropped by 26% to 155. This is also 33% down on the fourth quarter of 2015-16.

The Minister continued: “There is no question Scotland’s businesses continue to face a challenging and uncertain future and it is a great testament to how robust and resolute they are that numbers of companies being forced to shut their doors continues to drop.

“The fall in numbers this quarter, and indeed throughout the year as a whole, is welcome. However, we must remain vigilant in this respect and we will do everything in our power to ensure this trend continues, companies can flourish and we protect employment.”


A full statement of Scotland’s insolvency statistics for the fourth quarter of 2016-17 is available here.

AiB reports on the number of corporate insolvencies and member voluntary liquidations logged. As a consequence of the time taken between the date a corporate insolvency is awarded or a member voluntary liquidation is registered and when AiB receives notice, the figures may not exactly reflect the number of corporate insolvencies awarded or member voluntary liquidations registered during a quarter.

The figure for the quarter is made up of 92 compulsory liquidations and 63 creditor voluntary liquidations. For the second quarter in succession, there were no receiverships recorded for the quarter. There were also 119 members' voluntary liquidations, which is down from the 151 recorded in the previous quarter.

Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy’s website www.aib.gov.uk


Gavin Cameron, Communications Manager, Accountant in Bankruptcy

Telephone: 0300 200 2636 / 07976 183010


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