These statistics show insolvencies in the fourth quarter of year ending 31/03/10, published on 7 May 2010 by the Accountant in Bankruptcy. Figures are collated to 31 March 2010.

The number of Debt Payment Programmes approved under the Debt Arrangement Scheme (DAS) are also reported.

PERSONAL INSOLVENCIES

Personal insolvency data consists of both bankruptcy and Protected Trust Deed (PTD) figures.

There were 5,175 personal insolvencies in Scotland in the fourth quarter of 2009/10. This figure represents a decrease of 9 per cent on the previous quarter and a decrease of 10 per cent on the same period in the previous year.

In total there were 3,142 awards of bankruptcy, showing a decrease of 6 per cent on the previous quarter and a decrease of 17 per cent on the same period in the previous year.

The number of Protected Trust Deeds recorded was 2,033 in total, a decrease of 13 per cent on the previous quarter and an increase of 3 per cent on the corresponding quarter of last year.

Chart 1: Insolvencies in Scotland

The individual awards of bankruptcy were broken down as follows:

• 2,483 awards were made as a result of debtor applications to the Accountant in Bankruptcy, a decrease of 14 per cent on the previous quarter and an increase of 4 per cent on the same quarter last year. Of these, 1,905 were awarded bankruptcy through LILA **
• 570 awards resulted from petitions to the courts by creditors, an 11 per cent decrease on the previous quarter and a decrease of 25 per cent on the same quarter last year
• 89 awards were made as a result of petitions to the court by trustees in a trust deed. This represents a 33 per cent decrease on the previous quarter and a 33 per cent decrease on the same quarter last year

** The Low Income, Low Asset (LILA) route into bankruptcy allows people who meet the relevant criteria to apply for their own bankruptcy without proving apparent insolvency or having creditor concurrence. The Bankruptcy and Diligence etc. (Scotland) Act 2007 introduced the LILA route and has widened access to bankruptcy and consequently no direct comparison should be drawn between bankruptcy figures after the introduction of LILA and those reported previously.

Table 1: Personal Insolvencies by Quarter

						Percentage	Change
Financial Year	2008/09		2009	/10(p)		2009/10	Q3 on:
Quarter	Q4	Q1	Q2	Q3	Q4	09/10 Q3	08/09 Q4
Award of Bankruptcy	3,772	3,730	3,504	3,350	3,142	-6%	-17%
Breakdown of awards by source:
Creditor Petitions	759	620	637	637	570	-11%	-25%
Trust Deed Petitions	132	98	90	132	89	-33%	-33%
Debtor Applications	2,881	3,012	2,777	2,581	2,483	-4%	-14%
of which LILA	2,284	2,394	2,107	1,990	1,905	-4%	-17%
of which other	597	618	670	591	578	-2%	-3%
Protected Trust Deeds	1,971	2,564	2,263	2,328	2,033	-13%	3%

p - Figures for 2009/10 will remain provisional until validation following the end of the financial year.

Table 2: Personal Insolvencies by Financial Year

Financial Year	2005/06	2006/07	2007/08	2008/09	2009/10
					Year to Date
1. Bankruptcies	5,423	5,885	6,158	14,777	13,726
2. Protected Trust Deeds	7,199	8,298	7,509	7,633	9,188
3. Total Personal Insolvencies	12,622	14,183	13,667	22,410	22,914

Note: LILA route to bankruptcy introduced at start of 2008/09 financial year.

DEBTOR APPLICATIONS

The Accountant in Bankruptcy received 2,717 debtor applications for bankruptcy in the fourth quarter of 2009/10. At the end of the quarter 268 applications were still being processed. During the quarter 148 applications were rejected as the criteria for bankruptcy had not been demonstrated and 25 were returned mainly due to incorrect completion.

CASE ADMINISTRATION

In Scotland, a trustee is appointed to administer each bankruptcy. A nominated insolvency practitioner may be appointed as trustee or the Accountant in Bankruptcy may be appointed. For the fourth quarter of 2009/10 the Accountant in Bankruptcy was appointed trustee in 2,835 cases awarded, representing 90 per cent of bankruptcies for the quarter.

DEBT ARRANGEMENT SCHEME

During the quarter there were 417 Debt Payment Programmes approved, an increase of 10 per cent on the previous quarter and an increase of 52 per cent on the same quarter in the previous year.

Table 3: Debt Payment Programmes by Quarter

						Percentage	Change
Financial Year	2008/09		2009	/10		2009/10	Q4 on:
Quarter	Q4	Q1	Q2	Q3	Q4	2009/10 Q3	2008/09 Q4
Debt Payment Programmes under the Debt Arrangement Scheme	275	310 ( r)	310	380	417	10%	52%

r - Revised figure for quarter 1 2009/10 following end of year validation. Previously shown as 316.

COMPANY LIQUIDATIONS AND RECEIVERSHIPS

Receiverships and liquidations are of those companies which the Court of Sessions has jurisdiction to wind up, and are recorded in the Register of Insolvencies (RoI).

The Accountant in Bankruptcy received 282 notices of Scottish registered companies becoming insolvent or entering receivership in the fourth quarter of 2009/10. This figure includes 6 receiverships, 204 compulsory liquidations and 72 creditors' voluntary liquidations.

Accountant in Bankruptcy has reviewed the collection of data for company liquidations. Figures for 2008/09 are based on the registration of notice of the appointment of liquidator, including provisional liquidators. The figure for 2009/10 is based on court orders for compulsory liquidations. Consequently, the 2009/10 figures are a more accurate statement of compulsory liquidations recorded in the RoI. However, the figure for 2009/10 should not be directly compared with the published figures for 2008/09.

Further to this, the Accountant in Bankruptcy is now able to report on members' voluntary liquidations for the 2009/10 financial period.

Table 4: Company Liquidations and Receiverships

						Percentage	Change
Financial Year	2008/09		2009	/10		2009/10	Q4 on:
Quarter	Q3	Q1	Q2	Q3(r)	Q4	2009/10 Q1	2008/09 Q2
Receiverships	6	8	16	3	6	-100%	-0%
Compulsory Liquidations	162	118	116	138	204	48%	-
Creditors' Voluntary Liquidations	63	58	49	73	72	-1%	14%
Total Corporate Insolvencies	231	184	181	214	282	32%	-
Members' Voluntary Liquidations	-	42	40	52	37	-29%	-

r - Revised figure for Q3 2009/10 Compulsory Liquidations from 139, Creditors' Voluntary Liquidations from 74

Notes

• The Accountant in Bankruptcy supervises all personal insolvencies in Scotland and administers those bankruptcies where appointed. Insolvent individuals in Scotland are subject to bankruptcy (sequestration) or enter Protected Trust Deeds (PTDs) under the Bankruptcy (Scotland) Act 1985. The 1985 Act was amended by the Bankruptcy (Scotland) Act 1993 and on 1 April 2008, part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 came into force making significant changes to some aspects of bankruptcy in Scotland. Changes included the introduction of LILA, a route into bankruptcy for people with low income and low assets. The changes also took a number of processes out of the Scottish Court system, reducing costs and freeing up court time.
• PTDs are voluntary arrangements, where the debtor passes his estate to an insolvency practitioner who arranges to repay part of the debt to creditors on the debtor's behalf. This is similar to Individual Voluntary Agreements (IVAs) in England and Wales, although there are important differences in the way they are set up and administered.
• The Debt Arrangement Scheme (DAS) is administered by the Accountant in Bankruptcy. Debt Payment Programmes approved under DAS allow individuals to repay their debts in full over an extended period of time whilst providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. The legislation relating to DAS is contained in the Debt Arrangement and Attachment (Scotland) Act 2002 and subsequent regulations.
• The Accountant in Bankruptcy is also responsible for receiving, extracting and recording information from certain forms relating to company liquidations and receiverships. The legislation appropriate to liquidations and receiverships is contained in the Insolvency Act 1986 and the Insolvency (Scotland) Rules 1986.
• Details of bankruptcies, PTDs, liquidations and receiverships are found on the register of insolvencies, which is maintained by the Accountant in Bankruptcy. Further information on DAS, including a register of DPPs, is available at www.moneyscotland.gov.uk
• Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy website at www.aib.gov.uk