There was a drop in the number of personal and corporate insolvencies in Scotland over the third quarter of 2013-14, according to new figures from Scotland’s Accountant in Bankruptcy (AiB). The news follows the recent AiB announcement that there has also been a slight fall in the use of diligence across the country.
Insolvency figures
According to the AiB, there were 3,335 personal insolvencies in Scotland between the start of September and the end of December last year – down 2.2% on the previous quarter, and a drop of 13.7% compared to the same quarter of the previous year.
The figures are both good and bad news for creditors, as Fergus Ewing, Minister for Energy, Enterprise and Tourism, explained:
“The overall demand for statutory debt solutions in Scotland continues to decline. The number of bankruptcies awarded in Scotland has been decreasing since 2008-09 and we expect this to continue.”
“However, we must also recognise that – within this overall, decreasing trend – the proportion of people entering bankruptcy, with little income and few assets, is rising. This quarter, 49.4% of all applications were made via the ‘Low Income, Low Asset’ route. This is a 7.9% point increase, compared to the equivalent figure from last year.”
Personal insolvency
The statistics reveal a continued increase in the use of the Debt Arrangement Scheme (DAS). They show that 1,181 applications were approved during the quarter and a total of £7.7 million repaid, which is an increase of 6.1% over the previous quarter and brings the total repaid in the nine months of 2012-13 to £21.9 million.
Overall, the number of bankruptcies awarded, protected trust deeds (PTDs) registered and DAS applications approved totalled 4,516 this quarter – 8.2% lower than the corresponding quarter of the previous year. This suggests that the overall demand for statutory debt solutions in Scotland continues to decline and at a higher rate in 2013-14 compared with the previous year.
Looking at PTDs in particular, the AIB says that the number of registrations between September and December fell by only 1.4% on the previous quarter, but has dropped 17.5% since the third quarter of 2012-13.
The figures are interesting, given the fact that new regulations relating to PTDs are now in force, partly aimed at improving the returns available for creditors.
Company liquidations and receiverships
Turning to company insolvencies, the AiB reports a 14.6% decrease in Scottish registered companies becoming insolvent or entering receivership since the last quarter. Overall, there were 229 notices of Scottish registered companies becoming insolvent or entering receivership sent to the AiB in the third quarter of 2013-14.
This figure includes two receiverships, 163 compulsory liquidations, and 64 creditors’ voluntary liquidations. There were also 119 members’ voluntary liquidations.
Scottish diligence figures
The slight improvement in the insolvency figures follows on from statistics published by AiB late last year, revealing a three percent drop in the use of diligence, such as arrestments and inhibitions, in Scotland. (See our earlier blog for more details).
Perhaps the upturn in the economy is beginning to make its way through to creditors?
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