Drop In Level Of Scots Accessing Debt Solutions
May 2017

The most recent figures released by Accountant in Bankruptcy (AiB) detailing the levels of Scot’s seeking debt relief in the fourth quarter 2016-17 indicate a drop in the number of people getting in to financial difficultly.

These AiB figures for the fourth quarter of 2016-17 show a fall in bankruptcies and protected trust deeds in Scotland. According to the data fewer Scots are accessing these statutory debt solutions when compared with the third quarter 2016-17, with the total personal insolvencies falling by 3.9%. Breaking this figure down further it was reported that bankruptcies fell by 0.4% while the number of protected trust deeds recorded decreased by 6.6%.

The data gathered on approved debt payment programmes under the Scottish Government’s Debt Arrangement Scheme (DAS) also looked promising with the total sum being repaid through these schemes dropping from £9.6 million to £9.2 million. The recent quarter saw 400 debtors pay off their debts in full through DAS, with 423 DAS debt payment programmes being completed which is up from the third quarter’s total of 408 and has significantly increased from 2015-16 fourth quarter where only 328 DAS debt payment programmes were completed.

DAS is a scheme which allows debtors to pay off their debts without facing insolvency & despite insolvency levels for the 2016-17 fourth quarter having risen by 11% from the previous quarter and increased by 18% for the year as a whole it is now sitting at the second lowest level in the last decade. These figures reflect the fact that the number of insolvencies in 2015-16 were lower than usual due to the system having to adjust to the changes in legislation which were introduced in April 2015. This legislation introduced a collection of measures including mandatory money advice for people seeking access to statutory debt relief solutions; a new web-based bankruptcy application system; and a common financial tool for money advisers allowing them to quickly assess whether individuals can contribute towards the repayment of their debts. Despite this rise due to the delay while the systems were having to adapt personal insolvency levels are moving in the right direction – they have more than halved since 2008-09.

Commenting on these latest figures, Alex M Adamson’s General Manager, Kevin MacKay, said: “These figures reflect our experiences of the previous 12 months where the increased options and greater clarity has provided clearer signposting for obtaining practical advice to those in financial difficulties, reducing the volume who require to access the personal insolvency process. There will always be circumstances where signing a trust deed or being sequestrated are the only sensible and practical solutions but ensuring that this is the last resort for most people in debt is critical for a successful economy. As an organisation we always aim to provide clear guidance on accessing free and impartial advice to those in financial difficulty at the earliest opportunity and have developed our own financial assessment processes to match those used by the Common Financial Tool.”

It is clear that these drop in numbers are welcome to allow the economy to flourish however as the Minister for Business, Innovation and Energy, Paul Wheelhouse MSP said, it is important to remain vigilant and continue to take steps to ensure this trend carries on throughout 2017. Here at Alex M Adamson we will continue to make it a priority to provide debtors with clear guidance on how to access free and impartial advice, as well as highlighting the debt solutions available to them such as the DAS payment programmes.

Read the full statement Scottish insolvency statistics for the 2016-17 fourth quarter