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|Downward trend for Scots insolvency continues|
|Wednesday, 27 January 2016|
New figures from Accountant in Bankruptcy (AiB) show the number of total personal insolvencies in Scotland have dropped 11 per cent on the same period a year ago.
Total personal insolvencies include both bankruptcies and protected trust deeds and totalled 2,345 for the third quarter of 2015-16 up to 31 December, which is a 5.2 per cent increase on the previous quarter.
Taken as a whole, the Scottish Insolvency Statistics for the third quarter of 2015-16 show a return to relative stability following a bedding-in period after the introduction of the Bankruptcy and Debt Advice (Scotland) Act, which amended the laws governing bankruptcy on 1 April 2015.
Personal insolvencies in Scotland have been dropping consistently since 2008-09, and the numbers fell significantly in the first quarter of 2015-16, which marked the first months since the new legislation came into force.
The new figures for the third quarter of the year show 989 bankruptcies were awarded - a marginal increase of 2.5 per cent on the previous quarter, although it is still 37.4 per cent lower than during the same period a year ago. Protected trust deeds recorded went up 7.2 per cent from the previous quarter to 1,356.
The number of new debt payment programmes approved under the Debt Arrangement Scheme (DAS) increased 13.4 per cent to 517 this quarter after several quarters of decline. A total of £9.4 million was repaid through DAS to creditors this quarter which, while signifying a 2 per cent decrease on the amount repaid during the previous quarter, is 0.9 per cent more than during the corresponding quarter of a year ago.
A total of 312 DAS debt payment programmes were completed in the third quarter of 2015-16, which is a 46.5 per cent increase compared to the same quarter of 2014-15. 969 DAS debt payment programme cases have already been completed in the first three quarters of 2015-16, which is 73 more than the whole of 2014-15.
Commenting on the latest figures, Business Minister Fergus Ewing said: “These figures indicate more people are taking action to regain control of their finances.
“The changes we introduced last year introduced the Scotland’s Financial Health Service website and helpline to direct people worried about their finances to trusted sources of advice and information. We also improved access to debt relief for the most financially vulnerable people in Scotland.
“Innovative measures like compulsory money advice, financial education and a new route into bankruptcy for people with few assets have now been absorbed by the industry and those most in need are now accessing the debt relief they require to help them on the road to a fresh financial start.
“It is nevertheless clear the big picture shows a decline in the number of people having to utilise a statutory debt relief or debt management product. The numbers are significantly down on last year and we will do everything we can to ensure this long term trend continues.”
The number of Scottish business failures rose from 180 in the previous quarter to 254. However, Accountant in Bankruptcy reports on the number of corporate insolvencies and member's voluntary liquidation logged on AiB's system. As a consequence of the time taken between the date a corporate insolvency is awarded or a member's voluntary liquidation is registered and when AiB receives notice, the figures may not exactly reflect the number of corporate insolvencies awarded or member's voluntary liquidation registered during a quarter.
The figure for the quarter is made up of 172 compulsory liquidations and 80 creditor's voluntary liquidations. There were only two receiverships recorded for the quarter.
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