Is “austerity” to blame for a rise in personal insolvency in Scotland?
The Scottish Government’s department which administers the insolvency process in Scotland, the Accountant in Bankruptcy (AiB), has confirmed that personal bankruptcies increased by 11.2% year-on-year to 1,289 in the three months to 30 June and that protected trust deeds rose 22.9% over the same period to 1,550. There has also been a similar rise in the number of debt payment programmes under the Debt Arrangement Scheme (DAS), which were also up by 16.8%.
By comparison, there were 200 liquidations (a method of corporate insolvency), which was a drop of 24.5%.
Paul Wheelhouse, the Scottish Government’s Business Minister, blamed the sharp rise in personal insolvencies on “austerity”, saying;
“On the personal insolvency front, there is no question that continuing austerity has led to incomes being squeezed and more people suffering the anxiety and distress of insolvency as a result”.
The Scottish Conservatives finance spokesman, Murdo Fraser, has blamed the rise on the SNP’s economic growth, saying;
“Given the lacklustre growth in the Scottish economy over the last year, we are starting to see the consequences of it as more and more people are struggling in a sea of debt”
Regardless of the reason for the rise, what is clear is the rise of personal insolvency contrasts sharply with the corporate insolvency figures.
If you wish to discuss either personal insolvency matters or financial difficulties within your business, our insolvency team are only too happy to discuss matters practically and confidentially. Our team is committed and experienced in finding commercial solutions to problems and can be contacted directly through Pamela Muir, Head of Insolvency and Restructuring or through your usual Morison’s contact.