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24/07/13 10:00

Scottish insolvencies for first quarter 2013-14

Figures released today show that personal and company insolvencies in Scotland have risen slightly in the first quarter of 2013-14, but continue to fall in comparison with the previous year.

The Debt Arrangement Scheme (DAS), continues to be seen as a viable alternative to bankruptcy.

Official statistics from Accountant in Bankruptcy (AiB), Scotland’s Insolvency Service, show that personal insolvencies have increased by 14.7 per cent on the previous period. Contributing to this is the increase in the number of Protected Trust Deeds (PTDs) by almost a quarter on the last period. However, personal insolvencies are still 28.6 per cent lower than the same quarter of the previous year as they totalled 3,999 in the first quarter of 2013-14.

The Debt Arrangement Scheme , the Scottish Government’s debt management tool which allows people struggling with debt to pay back what they owe over a longer period, continues to be used as an alternative to personal insolvency. The number of debt payment programmes approved under the Scheme has grown, with 1,200 applications approved in this quarter, representing almost a four-fold increase since 2009-10. A total of £7.0 million was repaid through DAS during this quarter.

The data on corporate insolvencies show that there were 184 notices of Scottish registered companies becoming insolvent or entering receivership – an increase of 28.7 per cent since the last quarter although this is a 56.2 per cent decrease on the same quarter of the previous year.

Minister for Energy, Enterprise and Tourism, Fergus Ewing, who has responsibility for personal insolvency and debt management in Scotland commented on the recent figures:

“Although these new figures mark an increase in personal bankruptcies this quarter, it is encouraging to see that there continues to be a reduction on levels compared to this time last year and a general decline since 2008-09.

“In line with our vision for a ‘Financial Health Service’, the Scottish Government has been taking significant measures to meet the very difficult challenges faced by those who are experiencing financial hardship. The Debt Arrangement Scheme, an important part of this vision, has recently been strengthened to aid even more people in Scotland and I expect to see an increase in the number of people who will benefit from this successful scheme.

“The reforms proposed in the Bankruptcy and Debt advice (Scotland) Bill will provide a system of debt advice, debt relief and debt management fit for modern society.

“The new system will ensure that the rights and needs of those in debt are balanced with the needs of creditors and businesses and that those having to deal with the burden of debt are made aware of the need for appropriate advice”.

Notes to editors

A full statement of Scottish insolvency statistics for the first quarter of 2013-14 is available.

Accountant in Bankruptcy (AiB) is an Executive Agency of the Scottish Government with responsibility for administering the process of personal bankruptcy, administering the Debt Arrangement Scheme (DAS) and recording corporate insolvencies in Scotland. AiB’s mission is to ensure access to fair and just processes of debt relief and debt management for the people of Scotland, which takes account of the rights and interests of those involved. The Agency operates independently and impartially whilst remaining directly accountable to Scottish Ministers.

The Debt Arrangement Scheme (DAS) is administered by AiB. Debt payment programmes approved under DAS allow individuals to repay their debts in full over an extended period of time while providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained.

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

An AiB Media Briefing Pack is available on the AiB website.