Scottish Insolvencies in the Third Quarter of 2009/10
20/01/2010
Official figures released by Accountant in Bankruptcy (AiB) today, 20 January 2010, show that there were 5,678 personal insolvencies in Scotland in the third quarter of 2009/10 - a 2 per cent drop compared to quarter two and down 3 per cent on the same period in the previous year.
Personal insolvency data consists of both bankruptcy and Protected Trust Deed (PTD) figures. Company Liquidations and Receiverships figures are for companies registered in Scotland.
Acknowledging these latest official figures, Fergus Ewing Minister for Community Safety, commented:
"I am pleased to note that, even in these difficult economic times, there has been a further decrease in the number of personal bankruptcies over the last quarter.
"It is too soon to identify any trend in Corporate Insolvency figures given the recent change in the way the figures are collected.
"We will continue to do absolutely everything we can to support Scottish business and families during these tough times. That includes our work to make sure people who are struggling with unmanageable debt get the help and support they need.
"Our response to the report of the Debt Action Forum made clear that we will take action - for example to extend the protection that's given to the family home in bankruptcy to protected trust deeds. The Low Income Low Asset route into bankruptcy (LILA), introduced in April 2008, continues to provide much needed debt relief for thousands of Scottish debtors who were previously struggling with debt but unable to access bankruptcy. We will build on the successful implementation of LILA and ensure that bankruptcy is available as a last resort for all insolvent debtors by creating a certificated route that is fair and open.
"I'm confident that this work will help make sure fewer Scots have to deal with the stress of unmanageable debt and those that do find themselves in that position get the help they need to get back on their feet."
Statistics in brief:
> 3,350 were awards of bankruptcy; a 4 per cent drop on the previous quarter and a 16 per cent drop on the same period in the previous year.
> 2,328 were Protected Trust Deeds; up 3 per cent on the previous quarter and up 27 per cent on the corresponding quarter of last year.
> 2,581 awards were the result of debtor applications; down 7 per cent on the previous quarter and a decrease of 21 per cent on the same quarter last year. Of these, 1,990 were awarded bankruptcy through LILA.
> 637 awards resulted from petitions to the courts by creditors; no change on the previous quarter and an increase of 2 per cent on the same quarter last year.
> 132 awards were made as a result of petitions to the court by trustees in a trust deed; a 47 per cent increase on the previous quarter and up 7 per cent on the same quarter last year.
> 216 notices of Scottish registered companies becoming insolvent or entering receivership; this figure includes 3 receiverships, 139 compulsory liquidations and 74 creditors' voluntary liquidations.
A full statement of Scottish insolvency statistics for the third quarter of 2009/10 is now available.Notes
1. 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.
2. 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. A Protected Trust Deed is not a bankruptcy.
3. 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.
4. 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.
5. 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 our websitewww.aib.gov.uk