The overall number of Scots going bust in 2018 rose 13.6% compared to the previous year according to analysis of the latest Accountant in Bankruptcy figures (AiB uses financial year so their current statistics show the period from October to December as the third quarter whereas we are using the calendar year) by accountants and business advisers French Duncan LLP. The latest figures from the Accountant in Bankruptcy reveal that overall personal insolvencies rose from 10,585 in 2017 to 12,025 in 2018.
The number of Scots being made bankrupt has remained almost static increasing by just two people. Whereas the number of those taking out a Protected Trust Deed (PTD) has risen by 23.9% over the last year. Over the last three years the number of Scots taking out a PTD has increased by 70.4% whereas the number of those being sequestrated has risen by just 5.8%.
Eileen Blackburn is Head of Restructuring and Debt Advisory at accountants French Duncan LLP, explained: “The increase in the number of personal insolvencies in 2018 will not have come as a surprise to anyone dealing with individuals in debt. This is the fourth year in a row in which personal insolvencies have increased and there are clear signs that large numbers of the Scottish population continue to experience serious financial problems.”
“With 33 Scots a day going bust during 2018 the country continues to have a problem with long term debt despite benign interest rates and high levels of employment. The annual number of Scots being bankrupted has increased by almost 40% (37.4%) in just three years.”
Eileen continued: “In particular, the number of Scots taking out a Protected Trust Deed (PTD) has risen substantially over the last three years increasing by over 70% since 2015. As this is usually a route out of debt utilised by the more affluent who have property and assets this is of considerable concern.”
“This increase in the number of personal insolvencies indicates the enormous number of individuals who have simply been existing with their debt, meeting the interest payments but never addressing the underlying amount. These are individuals who can be tipped into insolvency by any one of a number of changes in their lives: from fewer overtime hours; a sudden change in personal circumstances; to divorce, illness or injury reducing their income. They have no financial buffer to prevent their debts engulfing them in a relatively short period.”
Eileen concluded: “Some of this debt could still be a hangover from the financial crash of 2008 or have simply built up over a number of years and is now insurmountable. It is an indication of just how deep-rooted serious debt now is within Scottish society. Until 2004 over 12,000 Scots going bust each year would have been unheard of. But personal insolvency has become normalised and more commonplace. Individuals who find themselves with long term debt which never reduces, which is a monthly struggle to meet the interest payments are in serious financial trouble and should seek advice. Nobody needs to live with this level of indebtedness and there are ways of getting out of this debt. Those who feel that their financial position is out of control should immediately seek help before they become an unfortunate insolvency statistic.”
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