Quarter 1 Insolvency Statistics 2011/12 | Accountant in Bankruptcy

Statistics showing insolvencies in the first quarter of year ending 31/03/12 are published today, 20 July 2011, by the Accountant in Bankruptcy. Figures are collated to 30 June 2011.

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

PERSONAL INSOLVENCIES

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

There were 5,319 personal insolvencies in Scotland in the first quarter of 2011/12. This figure represents a 25 per cent increase on the previous quarter and a decrease of 1 per cent on the same period in the previous year.

In total there were 2,947 awards of bankruptcy, a 10 per cent increase on the previous quarter and a decrease of 6 per cent on the same period in the previous year.

The number of Protected Trust Deeds recorded was 2,372 in total, an increase of 51 per cent on the previous quarter and an increase of 6 per cent on the corresponding quarter of last year.

Chart 1: Insolvencies in Scotland

The individual awards of bankruptcy were broken down as follows:

2,459 awards were made as a result of debtor applications to the Accountant in Bankruptcy, an increase of 13 per cent on the previous quarter and a decrease of 2 per cent on the same quarter last year. Of these, 1,305 were awarded bankruptcy through LILA;
445 awards resulted from petitions to the courts by creditors, no change on the previous quarter and a decrease of 21 per cent on the same quarter last year
43 awards were made as a result of petitions to the court by trustees in a trust deed. This represents a 37 per cent decrease on the previous quarter and a 44 per cent decrease on the same quarter last year

Note: The new Certified route into bankruptcy commenced on 15 November 2010. For the first quarter of 2011/12, 759 debtors were awarded bankruptcy who would otherwise have been unable to qualify. This represents a 37 per cent increase on the previous quarter where 555 awards were made through the Certified route.

Table 1: Personal Insolvencies by Quarter

Financial Year	2010/11 (p2)				2011/12	Percentage change 2011/12 Q1 on:
Financial Year	2010/11 (p2)				2011/12	Percentage change 2011/12 Q1 on:
*Quarter*	Q1	Q2	Q3	Q4	Q1	2010/11 Q4	2010/11 Q1
Awards of Bankruptcy	3,139	3,092	2,493	2,687	2,947	10%	-6%

Breakdown of awards by source:
Creditor Petitions	562	756	487	446	445	0%	-21%
Trust Deed Petitions	77	112	73	68	43	-37%	-44%

Debtor Applications	2,500	2,224	1,933	2,173	2,459	13%	-2%
of which LILA	1,897	1,631	1,368	1,204	1,305	8%	-31%
of which other	603	593	565	969	1,154	19%	91%

Protected Trust Deeds	2,239	2,076	2,090	1,575	2,372	51%	6%

p2 - Figures for 2010/11 will remain provisional until final 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	2010/11	2011/12
						Provisional	YTD
1 Bankruptcies	5,423	5,885	6,158	14,777	13,810	11,411	2,947
2 Protected Trust Deeds	7,199	8,298	7,509	7,633	9,188	7,980	2,372
3 Total Personal Insolvencies	12,622	14,183	13,667	22,410	22,998	19,391	5,319

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

DEBTOR APPLICATIONS

The Accountant in Bankruptcy received 2,540 debtor applications for bankruptcy in the first quarter of 2011/12. At the end of the quarter 78 applications were still being processed. During the quarter 68 applications were rejected as the criteria for bankruptcy had not been demonstrated and 53 were returned mainly due to the introduction of a new application form on 15 November 2010.

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 first quarter of 2011/12 the Accountant in Bankruptcy was appointed trustee in 2,279 cases awarded, representing 77 per cent of bankruptcies for the quarter.

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 first quarter of 2011/12 the Accountant in Bankruptcy was appointed trustee in 2,279 cases awarded, representing 77 per cent of bankruptcies for the quarter.

DEBT ARRANGEMENT SCHEME

During the quarter there were 643 Debt Payment Programmes approved, an increase of 35 per cent on the previous quarter and an increase of 30 per cent on the same quarter in the previous year.

Table 3: Debt Payment Programmes by Quarter

Financial Year	2010/11				2011/12	Percentage change 2011/12 Q1 on:

Quarter	Q1	Q2	Q3	Q4	Q1	2010/11 Q4	2010/11 Q1
Debt Payment Programmes under the Debt Arrangement Scheme	494	497	440	478	643	35%	30%

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 343 notices of Scottish registered companies becoming insolvent or entering receivership in the first quarter of 2011/12. This figure includes 4 receiverships, 251 compulsory liquidations and 88 creditors voluntary liquidations. There were also 63 members voluntary liquidations reported during the first quarter of 2011/12.

Table 4: Company Liquidations and Receiverships

*Financial Year*	2010/11				2011/12	Percentage change 2011/12 Q1 on:
Quarter	Q1	Q2	Q3	Q4	Q1	2010/11 Q4	2010/11 Q1
Receiverships	22	16	5	13	4	-69%	-82%
Compulsory Liquidations	210	147	177	199	251	26%	20%
Creditors' Voluntary Liquidations	72	84	83	82	88	7%	22%
Total Corporate Insolvencies	304	247	265	294	343	*17%*	*13%*
Members' Voluntary Liquidations	51	33	60	56	63	13%	24%

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 http://www.dasscotland.gov.uk
Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy website at www.aib.gov.uk