Scottish Insolvency Statistics
24/04/2009
Statistics showing insolvencies in the fourth quarter of year ending 31/3/09 are published today, 24 April 2009, by the Accountant in Bankruptcy. Figures are collated to 31/03/09.
INDIVIDUAL INSOLVENCIES
There were 5693 individual insolvencies in Scotland in the fourth quarter of this year. This figure represents a decrease of 2% on the previous quarter and an increase of 71% on the same period in the previous year.
In total there were 3722 awards of bankruptcy, a decrease of 6% on the previous quarter and an increase of 158% on the same period in the previous year.
The number of Protected Trust Deeds (PTDs) recorded totalled 1971, an increase of 7% on the previous quarter and an increase of 5% on the corresponding quarter of last year.
Insolvencies in Scotland
Total Insolvencies by Year
(Low Income, Low Assets (LILA) route to bankruptcy introduced at start of 2008/09 financial year).
The significant increase in bankruptcies is attributed to the introduction on 1 April 2008 of a new route into bankruptcy for people who have low income and low assets. Some people were previously unable to make themselves bankrupt unless they were apparently insolvent, (i.e. a creditor was taking legal steps against them to pursue what was owed) or they had the concurrence of a creditor. The Bankruptcy and Diligence etc. (Scotland) Act 2007 introduced the 'Low Income, Low Asset' (LILA) route, whereby people who meet the relevant criteria can apply for their own bankruptcy without proving apparent insolvency or having creditor concurrence. LILA has widened access to bankruptcy and consequently no direct comparison should be drawn between figures in the current year against figures reported on in previous years.
The Accountant in Bankruptcy received 3462 debtor applications for bankruptcy in the fourth quarter of 2008/09. In the quarter, 2284 individuals were awarded bankruptcy because they met the LILA criteria and 597 were awarded bankruptcy through apparent insolvency. At the end of the quarter, there were 409 applications still being processed and 482 applications had been rejected or returned. A new debtor application form was introduced in October 2008 and from 1 January 2009 the previous form could no longer be accepted. The number of applications rejected or returned in the fourth quarter has been affected as a result.
Petitions to the courts by creditors resulted in 711 bankruptcies for the quarter, an increase of 15% on the previous quarter and a decrease of 8% on the corresponding quarter of last year. There were also 130 awards as a result of petitions by trustees in a trust deed.
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. Since 1 April 2008, the Accountant in Bankruptcy has been appointed trustee in 13122 cases representing 90% of all bankruptcies awarded so far this year. The Accountant in Bankruptcy is trustee in all bankruptcies awarded through LILA. Of the non-LILA bankruptcy awards where the Accountant has been appointed trustee, 29% of cases are being administered in-house and the remainder are being administered by insolvency practitioners carrying out work on behalf of the Accountant.
Personal Insolvencies by Quarter
# - Q4 creditor petition, trust deed petition and debtor application figures do not include late awards for the year. Any awards not yet recorded will be included in the Annual Report to be published later in the year by the Accountant in Bankruptcy.
COMPANY LIQUIDATIONS AND RECEIVERSHIPS
The Accountant in Bankruptcy received 231 notices of Scottish companies becoming insolvent or entering receivership in the fourth quarter of 2008/09. This figure includes 6 receiverships, 162 compulsory liquidations and 63 creditors' voluntary liquidations.
Company Liquidations and Receiverships
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. This Act was amended by the Bankruptcy (Scotland) Act 1993. 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, debt relief and debt enforcement in Scotland. Changes included the introduction of the new 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 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 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 (AiB). Further information about insolvency in Scotland, including legislation, can be found on this website.
Accountant in Bankruptcy
24 April 2009