News Article


Insolvency statistics: Scots' personal bankruptcy numbers rise in second quarter

By CreditMan Friday, July 26, 2013

The overall number of Scots going bust in the second quarter of 2013 rose by 14.7% compared with the first quarter and fell by 28.6% compared to the same quarter in 2012 according to analysis of the latest Accountant in Bankruptcy figures by leading accountants and business advisers BDO LLP. The latest figures from the Accountant in Bankruptcy reveal that overall personal insolvencies rose from 3,486 to 3,999.

The largest increase occurred in the number of Protected Trust Deeds (PTDs) which rose by 23.4% compared with the previous quarter whilst Low Income Low Asset (LILAs) sequestrations rose by 12.8%

Bryan Jackson, Business Restructuring partner, BDO LLP, explained: “Following recent falls, the increase in the number of personal insolvencies in the second quarter suggests that the pent-up indebtedness of many individuals has burst through. Of great concern is the increase in both PTDs and LILAs. PTDs are generally used by more affluent individuals whilst LILAs by the less well off in society. This would tend to indicate that personal insolvency is striking at all aspects of Scottish society.

“There is little doubt that many individuals have been living from month-to-month, or week-to-week, simply feeding the interest on their debts rather than reducing the debt itself. Until now, this has delayed some from falling into insolvency, but this quarter’s figures suggest that their financial situation has deteriorated beyond the point where they could cope and this has resulted in their bankruptcy.”

Bryan concluded: “Unfortunately, I think that we are likely to see continued increases in personal insolvencies in the months to come. The increase in the number of payday and short-term lenders is indicative of serious financial problems among thousands of Scots whose circumstances will only be exacerbated by such loans.”