Scots' personal debt on the rise as spectre of repossession looms

Published on Saturday 10 May 2008 14:25

PERSONAL debt among Scots is on the rise, according to data handed exclusively to Scotland on Sunday by one of the UK's leading credit reference agencies.

Court judgments for the non-payment of financial debts rose by 3% in Scotland during the first three months of the year, the analysis by Callcredit shows.

This compares with a 6% increase south of the border, where repossessions are soaring and property prices have gone into meltdown in many areas.

Mel Mitchley, director of industry relations at Callcredit, said: "Our data shows that the rise in Scottish court judgments is more muted than is being experienced in the rest of the UK, but set against the sharp increase in repossessions elsewhere it is still a worrying trend.

"Clearly, the rising cost of living is hitting families hard, and larger numbers are reaching the point where they can no longer make ends meet."

Court statistics showed that mortgage repossession litigation leapt 16% during the first three months of 2008 in England and Wales, where the property market has slumped. Yet in Scotland, where the property market remains relatively buoyant, law firms confirm instructions for mortgage repossession are also climbing.

Drew Taylor, senior partner at solicitors Fyfe Ireland, confirmed that the first signs of rising repossessions were coming through with the sharpest rise in evictions being experienced in Glasgow and Fife.

He said: "We are seeing some very overstretched borrowers, who are hit hard by the credit crunch and rising bills all round."

Yvonne Gallacher, chief executive of Money Advice Scotland, described the financial difficulties of many Scots as a "ticking time bomb".

She added: "We are seeing a huge surge in people coming in with mountains of debt and very complicated arrangements. But I honestly believe that the ones we are seeing so far are just the tip of the iceberg."