Scottish Insolvencies Up By 4%, Says Trust Deed Scotland Company
Insolvencies in Scotland have risen yet again, with Protected Trust Deeds and Debt Arrangement Scheme (DAS) approved payment plans shooting up in popularity, says Trust Deed Scotland Company, Scottish Trust Deed.
United Kingdom (PRUnderground) October 24th, 2011
The Accountant in Bankruptcy (AiB) released its second quarter figures for 2011, revealing bankruptcies have dropped while Debt Arrangement Scheme based on payment plans have rapidly increased. Overall bankruptcy awards are down 8% compared to the second quarter last year, while Protected Trust Deeds have strongly increased by 22%. Debt Arrangement Scheme approved payment plans have topped the popularity stakes however, with a whopping 72% increase since the same time last year.
Scottish minister Fergus Ewing, who oversees the insolvency and debt management arena, said: “Personal insolvencies for this period have increased slightly while bankruptcy awards have gone down which may be attributed to the increase in number of protected trust deeds as well as the success of the Certificate for Sequestration, introduced in November 2010 to give much needed debt relief to individuals who previously didn’t qualify.
“The notable increase in debt payment programmes approved under the Debt Arrangement Scheme was expected following AiB’s efforts to raise awareness of improvements which were made to the Scheme in July this year. With DAS offering a less severe alternative to bankruptcy and providing benefits to both parties – such as freezing of interest and charges for debtors and at least a 90 per cent return for creditors – I hope that Scots struggling with debt are encouraged to seek advice at an early stage.”
Between April and June of this year there were 5,378 personal insolvencies, an increase of 4% since the second quarter of last year. Bankruptcy awards accounted for 2,852 of them, while Protected Trust Deeds and the Debt Arrangement Scheme accounted for the rest at 2,526 and 856 respectively.
However, Low Income, Low Asset (LILA) bankruptcies, which were designed for those whose assets and income are so low they cannot afford to embark on a payment plan or pay the costs of a normal bankruptcy, have decreased by 26% to 1,223 since this time last year.
A spokesperson for Trust Deed Scotland Company, Scottishtrustdeed.co.uk, said: “It’s of no surprise that the number of personal insolvencies are on the rise given the current economic conditions, but it is good to see that the number of bankruptcy awards – both through LILA and through the normal routes – has gone down.
“This is due in part to more people being aware of the benefits of Protected Trust Deeds and DAS, where before they may have felt bankruptcy was the only option open to them. In particular DAS has been enormously influential in debt management, and steps taken this year to make it more accessible to a larger number of people will hopefully lead to a further lowering of bankruptcy awards in the future as people choose to stay the course and pay back what they owe their creditors.”
It’s not just personal insolvencies that have increased this quarter. Corporate insolvencies are on the rise too, with Scottish companies registering 361 notices of insolvency or receivership between April and June. This is a 5% increase since the previous quarter and a sizeable 46% increase since the same time last year.