Personal and Company Insolvencies Rise Again
25 July 2012

Official figures released by Accountant in Bankruptcy (AIB) today report 5,601 personal insolvencies in Scotland in the first quarter of 2012/13 - 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 per cent on the previous quarter and a 12.3 per cent increase on the same period from the previous year.

Changes to AIB's fees structure were introduced via the Bankruptcy Fees etc. (Scotland) Regulations 2012 which came into effect (in part) on 1 June 2012, including an increase in the fee for debtors applying for their own bankruptcy, may account for some of this increase: high numbers of debtors applied for bankruptcy in May, before the change, leading to a 36.1 per cent increase in bankruptcies by debtor application for the quarter. The number of 'Protected Trust Deeds' (PTDs) 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.

Figures for the Debt Arrangement Scheme (DAS) show that the number of 'debt payment programmes' approved under the Scheme have increased again this quarter, to 1,478, showing an increase of 56.9 per cent compared to the previous quarter and an increase of 129.9 per cent compared to the same period of last year.

AIB received 420 notices of Scottish registered companies becoming insolvent or entering receivership in the first quarter of 2012/13 - a 9.1 per cent increase on the previous quarter and a 22.4 per cent increase on the same period in the previous year.

The full story can be accessed at the AIB site

A similar rise in personal insolvencies is not expected next quarter as the new fees are now in force. Nevertheless the current levels of insolvencies will be a matter of concern for creditors. As usual AMA are always available for advice on the prospects of recovery both prior to and after insolvency. Our standard advice is to act quickly before an insolvency event arises.