The number of Scottish-registered companies becoming insolvent or entering receivership rose 22.4 per cent annually in the first quarter of 2012/13, according to new figures released today.
Accountant in Bankruptcy (AiB) received 420 notices of
Scottish registered companies becoming insolvent or entering receivership in Q1
2012/13 – a 9.1 per cent increase on the previous quarter and a 22.4 per cent
increase on the same period in the previous year.
The number of personal insolvencies in Scotland rose 14.9
per cent in Q1 2012/13. There were 5,601 personal insolvencies in Scotland in
Q1 2012/13 – a 14.9 per cent increase on the previous quarter and a 5.3 per
cent increase on the same period in the previous year.
Responding to the figures, Bryan Jackson, Convenor of the
ICAS Insolvency Committee and corporate recovery partner with PKF, said:
“We have seen long established, well known, businesses
collapse in the last year and yet, there appears to be no end in sight for the
misery facing Scotland’s business community.
"It is undoubtedly due to a whole
raft of factors including low consumer demand and confidence, with export
markets in turmoil due to the EU financial crisis, and economic figures which
are unrelentingly gloomy.”
In relation to the personal insolvency figures, Jackson said: “These
figures reveal just how little has changed in the economy since the start of
the recession in 2008 until today."
He said there was little sign of any improvement
in the coming year.
“These figures clearly show that there is no let-up in the
financial distress which Scots are experiencing from the poorest, with an
increase of almost 50% taking out a LILA, to the increase in Protected Trust
Deeds (PTD) meaning that the more affluent are also being badly hit.“
Personal insolvency data includes bankruptcy awards and
Protected Trust Deeds.
In total there were 3,310 awards of bankruptcy, a quarterly
increase of 26.0 per cent and a 12.3 per cent increase on the same period from
the previous year.
AiB cited change to its fees structures, which came into
effect at the June, as a cause for some of the increase.
These changes included an increase in the fee for debtors
applying for their own bankruptcy.
High numbers of debtors applied for bankruptcy in May, AiB
said, before the change, leading to a 36.1% increase in bankruptcies by debtor
application for the quarter.
The number of Protected Trust Deeds (PTDs) recorded was
2,291 in total, an increase of 2.0 per cent on the previous quarter and a
decrease of 3.4 per cent on the corresponding quarter of last year.
The number of debt payment programmes approved under the
Debt Arrangement Scheme (DAS) increased to 1,478, an increase of 56.9 per cent
compared to the previous quarter and an increase of 129.9 per cent compared to
the same period of last year.
Improvements made to DAS last year along with the promotion
of the Scheme have helped to raise awareness of the Scottish Government-backed
debt management tool and its benefits, according to AiB.
Jackson sounded a more downbeat note, saying: “With below
inflation wage rises, increased utility costs, and little sign of an end to the
economic misery, it is clear that many more tens of thousands of Scots will be
made bankrupt before we start to see an end to the after effects of this
For a debtors guide to insolvency in Scotland, click here.