Bankruptcy rate down as Scots turn to debt plans

Less Scots are being declared bankrupt. Picture: TSPL

But there has also been a significant fall in the number of people plunged into bankruptcy in the past year, as well as firms going bust.

There were 3,472 personal insolvencies for the period, which includes bankruptcy awards and protected trust deeds. This is 9.9 per cent down on last year and 28.8 per cent lower than the same period last year.

But the Government’s Debt Arrangement Scheme (DAS), which was established to allow people to pay back their debts over a longer period, is now the favoured option of struggling Scots.

There were 4,632 debt payment programmes reached in 2012–13, an increase of 39.6 per cent on the previous year.

Enterprise minister Fergus Ewing said: “I am pleased to see that personal bankruptcies have dropped for the third successive quarter this year. This is reassuring news in these difficult economic times and shows that the Scottish Government is doing all it can to increase Scotland’s economic growth.

“The Debt Arrangement Scheme (DAS) continues to see an increase in approved debt payment programmes, following AiB’s efforts to raise awareness of schemes and their benefits.”

New legislation will be introduced this summer to reform the law of bankruptcy and improve services for debt advice management and relief.

“This will help to ensure that the correct support is in place for people across Scotland who are facing financial and other challenges and that debt relief products are fit for purpose,” Mr Ewing added.

There were also 143 notices of Scottish registered companies becoming insolvent or entering receivership in the fourth quarter of 2012-13 – a 22.7 per cent decrease on the last quarter and a 62.9 per cent decrease on the same quarter of the previous year.