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Scottish insolvency statistics: Quarter 1 2012-13

Statistics showing insolvencies in the first quarter of financial year ending 31 March 2013 are published today, 25 July 2012, by Accountant in Bankruptcy (AiB). Figures are collated to 30 June 2012.
 
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 (sequestration) and Protected Trust Deed (PTD) figures.
 
There were 5,601 personal insolvencies in Scotland in the first quarter of 2012/13. This figure represents a 14.9 per cent increase on the previous quarter and a 5.3 per cent increase on the same period in the previous year.
 
In total there were 3,310 awards of bankruptcy, showing an increase of 26.0 per cent on the previous quarter and an increase of 12.3 per cent on the same period in the previous year.
 
The number of Protected Trust Deeds recorded was 2,291 in total, an increase of 2.0 per cent on the previous quarter and a decrease of 3.4 per cent on the corresponding quarter of last year.
 

Chart 1: Insolvencies in Scotland

Scottish Insolvency chart for quarter 1 2012-13

The individual awards of bankruptcy were broken down as follows:

·        2,915 awards were made as a result of debtor applications to the Accountant in Bankruptcy, an increase of 36.1 per cent on the previous quarter and an increase of 18.5 per cent on the same quarter last year. Of these, 1,563 were awarded bankruptcy through LILA
 
·        366 awards resulted from petitions to the courts by creditors, a 21.0 per cent decrease compared to the previous quarter and a 17.9 per cent decrease on the same quarter last year
 
·        29 awards were made as a result of petitions to the court by trustees in a trust deed. This represents a 38.1 per cent increase on the previous quarter and a 32.6 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 2012/13, 965 debtors were awarded bankruptcy who would otherwise have been unable to qualify. This represents a 24.7 per cent increase on the previous quarter, where 774 awards were made through the Certified route.
 

Table 1: Personal Insolvencies by Quarter 

 
Financial Year 2011/12 (r) 2012/13 (p) Percentage change     2012/13 Q1 on:
Quarter Q1 Q2 Q3 Q4 Q1 2011/12 Q4 2011/12 Q1
Awards of Bankruptcy 2,948 2,857 2,625 2,626 3,310 26.0% 12.3%
               
Breakdown of awards by source              
Creditor Petitions 446 439 373 463 366 -21.0% -17.9%
Trust Deed Petitions 43 70 31 21 29 38.1% -32.6%
               
Debtor Applications 2,459 2,348 2,221 2,142 2,915 36.1% 18.5%
of which LILA 1,305 1,223 1,080 1,060 1,563 47.5% 19.8%
of which other 1,154 1,125 1,141 1,082 1,352 25.0% 17.2%
               
Protected Trust Deeds 2,372 2,526 2,049 2,247 2,291 2.0% -3.4%

(r) - Figures for 2011/12 have been revised following validation of previous financial year's figures.
(p) - Figures for 2012/13 will remain provisional until final validation of end of year financial figures.

Table 2: Personal Insolvencies by Financial Year 

 

Financial Year 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 (r) 2012/13
                Year to date
1 Bankruptcies 5,423 5,885 6,158 14,777 13,810 11,443 11,056 3,310
2 Protected Trust Deeds 7,199 8,298 7,509 7,633 9,188 7,980 9,194 2,291
3 Total Personal Insolvencies 12,622 14,183 13,667 22,410 22,998 19,423 20,250 5,601

(r) - Figures for 2011/12 have been revised following validation of previous financial year's figures.
Note: LILA route to bankruptcy introduced at start of 2008/09 financial year.

DEBTOR APPLICATIONS
 
Accountant in Bankruptcy received 2,995 debtor applications for bankruptcy in the first quarter of 2012/13.  At the end of the quarter 70 applications were still being processed.  During the quarter 58 applications were rejected as the criteria for bankruptcy had not been demonstrated and 43 were returned due to application errors.
 
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 2012-13 the Accountant in Bankruptcy was appointed trustee in 2,611 cases awarded, representing 78.9 per cent of the bankruptcies for the quarter. 
 
DEBT ARRANGEMENT SCHEME
 
During the quarter there were 1,478 debt payment programmes approved, an increase of 56.9 per cent on the previous quarter and an increase of 129.9 per cent on the same quarter in the previous year.
 

Table 3: Debt Payment Programmes by Quarter

 

Financial Year 2011/12 2012/13 Percentage change 2012/13 Q1 on:
Quarter Q1 Q2 Q3 Q4 Q1 2011/12 Q4 2011/12 Q1
Debt Payment Programmes under the Debt Arrangement Scheme 643 856 878 942 1,478 56.9% 129.9%
 
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).
 
Accountant in Bankruptcy received 420 notices of Scottish registered companies becoming insolvent or entering receivership in the first quarter of 2012/13.  This figure includes 10 receiverships, 348 compulsory liquidations and 62 creditors voluntary liquidations.  There were also 58 members' voluntary liquidations. 
 

Table 4: Company Liquidations and Receiverships

 
Financial Year 2011/12 2012/13 Percentage change 2012/13 Q1 on:
Quarter Q1 Q2 Q3 Q4 Q1 2011/12 Q4 2011/12 Q1
Receiverships 4 14 8 9 10 11.1% 150.0%
Compulsory Liquidations 251 252 203 307 348 13.4% 38.6%
Creditors' Voluntary Liquidations 88 95 69 69 62 -10.1% -29.5%
Total Corporate Insolvencies 343 361 280 385 420 9.1% 22.4%
Members' Voluntary Liquidations 63 57 55 44 58 31.8% -7.9%

 

Notes

  • 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.

     
  • Protected Trust Deeds (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 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.

     
  • 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 and can be found at the Register of Insolvencies 

  • Further information on DAS, including a register of debt payment programmes, is available at the DAS Scotland website  

     
  • Further information regarding insolvency in Scotland, including legislation, can be found on AiB's website.