By Marcus Leach

Official figures from Accountant in Bankruptcy (AiB) report 5,319 personal insolvencies in Scotland in the first quarter of 2011.

The figures represent a 25 per cent increase on the previous quarter and a one per cent decrease on the same period last year.

Personal insolvency data consists of bankruptcy and protected trust deed (PTD) figures, and figures on the Certificate for Sequestration, which was introduced in November 2010. The Certificate provides a new route into bankruptcy and has provided debt relief for 759 debtors - a 37 per cent increase on the previous quarter.

There has also been a marked increase in the number of Debt Payment Programmes awarded through the Debt Arrangement Scheme (DAS), up 35 per cent from the previous quarter and an increase of 30 percent from the same quarter of the previous year. In the last quarter there has been an increased awareness of DAS, due to the development of changes brought in on 1 July aimed at widening access to the Scheme, offering debt management as a viable option to more Scots than ever.

Minister for Enterprise, Energy and Tourism, Fergus Ewing, who has responsibility for personal insolvency and debt management in Scotland, said:

“While these new figures mark an increase in personal bankruptcies this quarter, I am encouraged that there has been reduction on levels when compared to this time last year.

“The recent increase in individual bankruptcies can perhaps be explained by the success of the Certificate for Sequestration, introduced in November last year through the Home Owner and Debtor Protection Act to help people in need of debt relief who previously didn’t qualify.

“AiB’s work to raise awareness of the Debt Arrangement Scheme and its benefits — such as the freezing of interest and charges for debtors and at least a 90 per cent return for creditors - has been reflected in the increase in take-up of the Scheme. With more people now accessing DAS, figures suggest it is offering a sensible option to Scots struggling with debt who have sought advice early on. With the changes introduced on 1 July, I fully expect to see continued growth in DAS in coming months.”

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