Scots personal insolvency numbers fell 2.4 per cent in first quarter of 2015

The latest figures from the AiB reveal that personal insolvencies fell from 2,633 in Q4 2014 to 2,569 in Q1 2015 (please note that the AiB uses the financial year (April to March) as its base so although their current figure states Q4 this refers to January to March 2015 which BDO calls Q1).

The number of bankruptcies rose by 10.0 per cent from 1,577 to 1,735 despite low income low asset (LILA) sequestrations being at their lowest figure ever of 530 since they were introduced in 2008.

Protected trust deeds (PTDs) fell 21.0 per cent to 834 from 1,056 which is the lowest figure since 2001 although this may be accounted for by the introduction of several other means of entering the insolvency process.

Bryan Jackson, business restructuring partner with BDO, explained: “”It seems clear that personal insolvencies will remain higher than 10,000 per annum for the foreseeable future.

“This figure, although a welcome reduction from the 2009 peak when 23,541 Scots went bust, is still a relatively high figure historically and is an indication of just how much debt has crept into Scottish life over the last decade or so.”

““Although the Q1 2015 figures have gone down there is now a base level of individuals going bust in Scotland which, I believe, will remain in the coming years.””

Mr Jackson added: “”Rising house prices, continued benign interest rates, and improving optimism seem to make many people unconcerned about what might happen if any of these circumstances were to change.“

“”There remain concerns about the oil and gas industry and recent reports that many workers are considering leaving the North Sea market to find work elsewhere indicates the fragility of this important sector both as an employer and its contribution to the Scottish and UK economies.””

He concluded: “”Personal insolvency is not undertaken lightly by anyone and it is a concern that every week we seem to have a relatively large number of Scots who are made insolvent.

“It remains difficult to predict the direction of the economy given uncertainty over the outcome of the general election, continued low interest rates, the absence of inflation and the very high employment rate.

“Things are improving but whether these improvements filter down to individuals who may have been mired in debt for many years remains to be seen and I believe that we will have the current level of personal insolvency for a long time to come.””