The total number of people entered into some form of personal insolvency in Scotland increased by 5.5 per cent in the year to the end of March 2020.
Official figures compiled by the Accountant in Bankruptcy (AiB) show the fourth consecutive annual increase in personal insolvency rates across the country.
A key driver of the increase in insolvencies was rising demand for Protected Trust Deeds, of which there were 10.5 per cent more agreed in the year 2019/2020 as compared to the previous 12 months.
Meanwhile, Debt Arrangement Schemes continued to be a popular mechanism for dealing with debt problems and were entered into by 23 per cent more people across Scotland in the most recent financial year.
The latest figures published by the AiB reflect trends and demand for debt solutions in the 12 months up to the end of March, a point in time which coincides with the dramatic worsening of the coronavirus crisis.
Scotland, like so many other countries, has endured huge public health and economic difficulties due to the pandemic and that damage is expected to be reflected in the personal insolvency and debt solution figures for 2020/21.
“We can expect a significant increase in new case volumes as the economic consequences of the pandemic drive more people into a position in which they need the statutory debt solutions,” said Dr Richard Dennis from the AiB in the organisation’s latest full-year report.
Although many thousands of Scots have been able to take advantage of debt repayment holidays recently, the pandemic has nonetheless made debt problems substantially worse for a very significant number of people across the country.
Although 2019/20 saw the fourth consecutive increase in personal insolvency levels in Scotland, the AiB has said that rates have not been as high in recent years as they were in the several years following the financial crisis of 2008.
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Unusually high rates of inflation are threatening to sweep many more Scots into problem debt situations and serious financial difficulties.
People with debt problems in Scotland are being urged not to struggle with their issues alone and to reach out for help and support if they need it.
Our Scottish based team can help advise you on your debt problems.