THE number of people declaring themselves insolvent has fallen to its lowest level since the financial crash of 2008, new Scottish figures show.
• The number of Scots filing for insolvency has fallen to four-year low
• 3,855 personal insolvencies recorded in last three months of 2012
There were 3,855 personal insolvencies in the last three months of 2012, the lowest quarterly level in four years, insolvency authority Accountant in Bankruptcy said.
That represented a 5.1 per cent fall on the previous quarter, and 17.5 per cent down on the same months of the previous year.
In total, 18,392 people were made insolvent in 2012, with 1,264 businesses forced to close.
Fergus Ewing, minister for energy, enterprise and tourism, said: “While the reduction in bankruptcies is a positive sign, it is important not to be complacent.
“We must not forget that many Scottish families are still struggling with unmanageable debt and often the financial impact of Christmas is felt in January and February.”
It is the second successive quarter that insolvency figures have delivered rays of hope for the Scottish economy.
In the third quarter of 2012, personal insolvencies fell by a quarter, with corporate insolvencies down by almost as much.
In the most recent figures, corporate insolvencies fell by 32.5 per cent compared to the previous quarter, and 33.9 per cent compared to the same period in 2011.
According to Accountant in Bankruptcy, which collates the figures, the fall is partly due to people favouring the Scottish Government’s Debt Arrangement Scheme (Das) as an alternative route out of financial difficulty.
Das allows them to pay back money they owe over a longer period, as an alternative to bankruptcy.
However, there are positive signs here too, with a 3.9 per cent reduction in approved programmes in October to December compared to the previous three months, although this was still 21.5 per cent higher than in the same period in 2011.
The government says it has more plans to help people sort out their finances.
“We will bring forward a bill later this year which will provide for provision of debt advice, debt management and debt relief within a Financial Health Service, the purpose of which will be to ensure the rehabilitation of those with financial difficulties,” Mr Ewing said.
However, the Scottish Conservatives warned the government that it must do more to boost the economy in general, particularly through taxation and construction.
Gavin Brown, the party’s finance spokesman, said: “Given that Scotland is in the middle of a budget process, it is vital the SNP wakes up and makes this a budget that prioritises the economy.
“It has to get its construction pipeline moving and look seriously at the housing budget it decided to cut.
“The Scottish Government must also examine its approach to taxation, with its retail levy and empty properties tax increase being two damaging measures at precisely the wrong time.”
However, experts warned the figures do not tell the whole story.
In particular, they say protected trust deeds (PTD), typically used by more affluent Scots to become bankrupt, rose by 2.9 per cent during 2012, indicating continuing problems with jobs and homes.
Bryan Jackson, corporate recovery partner with PKF, said: “What these figures show is that, despite an overall fall in the number of personal insolvencies, there are still many thousands of Scots with jobs and with homes who are going bust.
“This is deeply worrying.”
He added: “The concern is that tens of thousands of Scots who have assets remain in deep financial trouble and are having to undergo the major decision to become bankrupt.
“Even after five years of the recession we are still seeing enormous numbers of individuals whose finances are out of control.”