Debt crisis as 200 Scots a week go bankrupt
MORE than 200 people are declared bankrupt every week in Scotland as insolvencies soar.
The third quarter of this financial year saw 2,616 people forced to declare themselves bankrupt or file for a protected trust deed in a bid to settle their debts.
This is a rise of 7.6 per cent on the previous quarter of 2016/17, and a 12.4 per cent rise on the same time last year.
Bankruptcies are up 14 per cent on last year at 1,116, with protected trust deeds – a form of voluntary bankruptcy – rising 10.6 per cent to 1,500. Experts blamed a tough economy and financial climate – and have warned that around 100,000 Scots will face personal ‘financial Armageddon’ by 2018.
The number of Scots drowning in debt has levelled off in recent years, but a brief dip was seen after the introduction of the Bankruptcy and Debt advice (Scotland) Act in April 2015.
The Act’s stated aim is to give debt advice, relief and management ‘fit to meet the challenges of the twenty-first century’. But its initial impact has not lasted.
Tim Cooper, Scottish chairman of the R3 group, which offers advice on debt and bankruptcy, said: ‘There are a lot of different things that affect this, and it is very difficult to pin numbers to any one factor.’
The third figures show bankruptcies rose 14 per cent, and protected trust deeds – a form of voluntary bankruptcy – up by 10.6 per cent. The overall year increase was 12.4 per cent.
Business minister Paul Wheelhouse said: ‘While one person experiencing the distress and anxiety of insolvency is one too many, numbers appear to be settling down a at a lower level than they have been.
‘However, there is no room for complacency. The Scottish Government will continue to do everything it can to protect the most financially vulnerable through support for financial education and providing access to debt relief and debt management.’
The number of Scottish companies declaring bankruptcy or entering receivership decreased in the third quarter of 2016/17 to 209 from 218 the previous quarter.