Number of Personal Insolvencies in Scotland Decreases Once Again
February 13, 2014
Some positive news for the Scottish economy – the number of Scots declared bankrupt in recent months has fallen 14% according to the latest insolvency data.
The figures show that around 50 Scots officially became insolvent every day between September and December last year, with the majority opting for bankruptcy (sequestration) closely followed by trust deeds and Debt Arrangement Schemes (DAS).
In total, 3,335 Scots were declared insolvent during the period according to data publicised by the Accountant In Bankruptcy – the government agency responsible for administering the process of personal bankruptcy and corporate insolvencies in Scotland.
Debt Arrangement Schemes (DAS), in particular, continue to increase with 1,181 applications approved in this quarter, equating to £7.7 million in creditor repayments.
Official figures also show that the specific ‘Low Income, Low Asset’ route, known as LILA, accounted for around half of all bankruptcy applications; a 7.9% increase in comparison to equivalent figures from last year.
Responding to the new figures, Enterprise Minister Fergus Ewing said:
“The overall demand for statutory debt solutions in Scotland continues to decline. The number of bankruptcies awarded in Scotland has been decreasing since 2008-09 and we expect this to continue.
“However, we must also recognise that – within this overall, decreasing trend – the proportion of people entering bankruptcy with little income and few assets is rising.”
He added: “Scotland’s bankruptcy legislation has to do more to provide a safety net for vulnerable, low-income debtors and their families.”
Although largely positive news, Minister Ewing stressed the need to continue on this path towards personal debt recovery throughout Scotland and not rest on collective laurels.
“While it is encouraging to see that personal insolvencies have gone down, it is important that we continue to work towards helping people stay out of debt and we will invest in supporting an educational programme to provide financial education to those most at risk.
“We are working towards a ‘Financial Health Service’ for Scotland, by introducing new legislation to provide a modern system of debt advice, debt relief and debt management. We will also continue to raise awareness across Scotland of the negative impact of high interest borrowing and promote Credit Unions as an ethical, sensible alternative.”
He added: “It is good to see that the use of the Debt Arrangement Scheme remains high, with more people using the scheme to take control of their finances and pay back their debts in a dignified way”.
This would become active from 2014.
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