Scottish personal bankruptcies lowest for 14 years - AiB

The AiB’s latest figures show there were 8,413 personal insolvencies recorded in Scotland during the last financial year.

Meanwhile, total personal insolvencies for the first quarter of 2016, which include both bankruptcies and protected trust deeds (PTDs), totalled 2,232.

This was consistent with the prevailing trend following the introduction of the Bankruptcy and Debt Advice (Scotland) Act 2014, the AiB said.

It was also shown that there were 997 bankruptcies awarded during the first three months of 2016, 8 bankruptcies more than the previous quarter.

After the increase in previous quarters, the number of PTDs saw a decrease this quarter. The number of PTDs decreased by 8.9 per cent from the previous quarter to 1,235. PTDs have outnumbered the bankruptcies awarded in each of the quarters this financial year, the AiB said.

The number of new debt payment programmes (DPPs) approved under DAS increased for the second successive quarter to 538.

A total of £9.4 million was repaid through DAS this quarter. This is 0.2 per cent higher than previous quarter.

The combined number of bankruptcies awarded, PTDs recorded and DAS DPPs approved has remained stable for the last three quarters. This quarter’s figures are 13.6 per cent lower than the same quarter last year.

The number of Scottish registered companies becoming insolvent or entering receivership decreased by 9.8 per cent in the fourth quarter of 2015-16, with 229 companies becoming insolvent.

The number of members’ voluntary liquidations (solvent liquidations) increased from 190 to 358.

The latest AiB data comes as new figures gathered by Creditsafe have shown that Scotland has seen the largest decline in the volume of business bad debts of all the areas of the UK over the last three years.

The credit report firm said incidences of unrecoverable monies following company liquidations fell by 36 per cent, from 1,139 in 2013, to 733 in 2015.

Creditsafe’s business credit report showed that from 2013 to 2014, there was a 22 per cent reduction, which slowed to 17 per cent between 2014 and 2015, corresponding with a reduction in the number of businesses entering liquidation.

This represented 1.77 per cent of all bad debt cases of this type in the UK.

This was down from two per cent in 2013, meaning that not only are these bad debts improving at a faster rate in Scotland than elsewhere in the UK, but that Scotland’s share of the burden is also falling.

The total value of bad debt left to UK firms, after companies were liquidated, totalled £4.2 billion in 2015.

The volume of this type of bad debt has fallen by a quarter since 2013, from a peak of 55,369 incidences to 41,328 last year.

“Credit checking and due diligence is aiding the business world in terms of protection for trading businesses,” said David Walters, data director, Creditsafe UK. “The economy as a whole is improving and we believe that proper due diligence and credit checking has had a large influence on this.”

Businesses located in Greater London have faced the greatest volume of exposure to bad business debts in the last three years, while the north-west was the only UK region where an increase was seen in the volume of these bad debts last year.