Personal Debt Woes Landing 1,000 Scots in Court Each Day

December 17, 2014

An average of more than 1,000 people in Scotland were taken to court because of their personal debts and outstanding arrears over the course of 2013/14, according to official figures from the Accountant in Bankruptcy (AiB).

The figures were published alongside a report that revealed a majority of the personal debt-related court cases brought across Scotland in the past year related to unpaid council tax arrears.

As many as 376,000 Scots were taken to court in relation to personal debts in the relevant period, which represents an increase of 20 per cent nationwide on the figure for the previous 12 months.

Only one area of Scotland, North Strathclyde, saw a fall in the number personal debt-related court cases in the last year, while the numbers in some parts of the country increased by almost 50 per cent, the Herald reports.

The fact that 80 per cent of newly-brought personal debt court cases across Scotland related to council tax arrears has prompted concern in some quarters, not least at Citizens Advice Scotland (CAS), which provides thousands of heavily indebted Scots with financial guidance every month.

“Scotland’s Citizens Advice Bureaux advised on over 13,500 council tax arrears issues this last year. That’s a seven per cent increase on the previous year,” said Keith Dryburgh, CAS policy manager.

“We think there are a number of factors which have impacted on people’s ability to keep up with their council tax. These include benefit cuts and low wages,” he said.

Dryburgh also expressed concern though that the debt collection practices of councils in Scotland are “being ramped up at just the time when families are less able to pay”.

“We understand councils need to recover monies owed, but this is still a time of economic constraint for many households who are struggling to make ends meet. Councils need to ensure that they support clients to seek independent, free and impartial advice,” he said.

The AiB’s figures offered a possible insight into why councils have suddenly become so much more willing and able to take debtors in Scotland to court over unpaid council taxes, with the number of summary warrants issued by councils rising 20 per cent in 2013/14.

“The introduction of these warrants has been welcomed by councils, because it means they can take court action to recover debts without having to pay any substantial legal fees,” explained Leonie Donald, a partner at the law firm Aberdein Considine.

“However, it is bad news for people in debt, because it means councils can move fast to recover the money they are due – whether that be through freezing funds in bank accounts or bankruptcy,” she said.

There are currently widespread fears that a potential rise in interest rates across the UK could force even more Scots into serious debt and into the position of facing court action over the course of 2015.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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