Scottish insolvencies reduced for fourth quarter 2012-13

27th April 2013

Accountant in Bankruptcy (AiB) today released official figures reporting personal and company insolvencies in Scotland for the fourth quarter of the financial year 2012-13.

There were 3,472 personal insolvencies for the period, which includes bankruptcy awards and protected trust deeds, and this was a 9.9 per cent decrease on the previous quarter. This was also 28.8 per cent lower than the corresponding quarter of the previous year. The total number of personal insolvencies is the lowest quarterly level since the Low Income Low Asset (LILA) route into bankruptcy was introduced in April 2008.

The decrease in personal insolvencies is almost entirely attributable to the decrease in the number of protected trust deeds (PTDs) recorded. These fell by 18.6 per cent on the previous quarter and by 26.5 per cent on the corresponding quarter of last year. Awards of bankruptcy decreased very slightly from the previous quarter (0.3 per cent) although this was 30.7 per cent lower than the same period from the previous year. There were 1,519 awards of bankruptcy by debtor application for the quarter and while this was up 3.8 per cent from the previous quarter, it was 29.1 per cent lower than the same period from the previous year.

Figures for the Debt Arrangement Scheme (DAS) show that there were 977 debt payment programmes approved under the Scheme in the fourth quarter of 2012-13. Although this was 8.4 per cent lower than the previous quarter, it was an increase of 3.7 per cent on the equivalent quarter from the previous year. Promotion of the Scheme to raise awareness of the Scottish Government-backed debt management tool and its benefits has resulted in the total number of approved programmes in 2012-13 being 39.6 per cent higher than in the previous year.

AiB received 143 notices of Scottish registered companies becoming insolvent or entering receivership in the fourth quarter of 2012-13. This is a 22.7 per cent decrease on the previous quarter and a 62.9 per cent decrease on the same period in the previous year.

A full statement of Scottish insolvency statistics for the fourth quarter of 2012-13 is available - http://www.aib.gov.uk/scottish-insolvency-statistics-quarter-4-2012-13

Accountant in Bankruptcy supervises all personal insolvencies in Scotland and administers those bankruptcies where appointed. Insolvent individuals in Scotland are subject to bankruptcy (sequestration) or enter protected trust deeds (PTDs) under the Bankruptcy (Scotland) Act 1985. The 1985 Act was amended by the Bankruptcy (Scotland) Act 1993 and on 1 April 2008, part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 came into force making significant changes to some aspects of bankruptcy in Scotland. Changes included the introduction of LILA, a route into bankruptcy for people with low income and low assets. The changes also took a number of processes out of the Scottish Court system, reducing costs and freeing up court time.
Protected trust deeds (PTDs) are voluntary arrangements, where the debtor passes their estate to an insolvency practitioner who arranges to repay part of the debt to creditors on the debtor’s behalf. This is similar to Individual Voluntary Agreements (IVAs) in England and Wales, although there are important differences in the way they are set up and administered.

The Debt Arrangement Scheme (DAS) is administered by Accountant in Bankruptcy. Debt payment programmes approved under DAS allow individuals to repay their debts in full over an extended period of time whilst providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. Further information on DAS, including a register of debt payment programmes, is available at http://www.dasscotland.gov.uk

Details of bankruptcies, PTDs, liquidations and receiverships are found on the register of insolvencies, which is maintained by Accountant in Bankruptcy and can be found at http://roi.aib.gov.uk/roi
Accountant in Bankruptcy is also responsible for receiving, extracting and recording information from certain forms relating to company liquidations and receiverships. The legislation appropriate to liquidations and receiverships is contained in the Insolvency Act 1986 and the Insolvency (Scotland) Rules 1986.

Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy’s website at www.aib.gov.uk