Fewer Scots have been made bankrupt in comparison to a year ago, according to latest figures from Accountant in Bankruptcy (AiB).
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In the third quarter of 2017-18 – between October and December 2017 - there were 1,089 awards of bankruptcy, a drop of 4.2% from the 1,137 in the same period for 2016-17. Bankruptcies have now fallen for the last two quarters.
Personal insolvencies in Scotland have more than halved since 2008-09, and the numbers fell in early 2015-16, the first months after the introduction of new legislation on 1 April 2015.
There was evidence more people were seeking to take control of their finances and pay their debts in full without suffering the uncertainty and stress of insolvency. Approved debt payment programmes under the Scottish Government’s Debt Arrangement Scheme rose by 8.5% in the third quarter of 2017-18, up from 528 to 573.
Driven by a rise in protected trust deeds, total personal insolvencies, which include awards of bankruptcy and protected trust deeds, rose slightly by 2.1% to 2,691.
Commenting on the latest figures, Scottish Government Minister for Business, Innovation and Energy Paul Wheelhouse said: “The longer term trend for bankruptcy is very much a downward one and it is heartening to see this reflected in these recent figures.
“There is absolutely no doubt in my mind the UK Government’s persistence with its failed policy of austerity is causing real hardship and strain for financially vulnerable families all across Scotland. They face even more challenges once the impact of the UK Government’s reckless determination to pursue an economically damaging Brexit becomes known.
“However, these Accountant in Bankruptcy figures indicate the numbers of people falling into bankruptcy and signing protected trust deeds are around half of what we saw eight or nine years ago. The Scottish Government is doing what it can to mitigate the worst of these Westminster policies.
“The Debt Arrangement Scheme is the only statutory debt management programme in the UK and we are rightly proud of its success in providing a viable option for those seeking to pay their debts without plunging into insolvency.â€
The number of Scottish companies going out of business also continued to fall, with total corporate insolvencies also down by 3.8%.
Total corporate insolvencies dropped from 210 to 202 compared to the same quarter a year ago. The figure for Q3 of 2017-18 is made up of 124 compulsory liquidations and 78 creditor voluntary liquidations. No receiverships were recorded for the fifth quarter in succession. There were also 129 members' voluntary liquidations, which is down from the 152 recorded in the same quarter for 2016-17.
The Minister added: “The shadow of Brexit looms over businesses the length and breadth of Scotland and it is clear this issue is having a negative impact on both growth and investment by our companies.
“It is a testament to the resilience of our industries, particularly in key sectors such as oil and gas, that we are beginning to see economic conditions improving and this is reflected in these encouraging corporate insolvency figures.
“Businesses continuing to trade means workers keep their jobs and this contributes to the sustainable economic growth of Scotland.†■