Hundreds more Scots declared insolvent
The number of Scots becoming insolvent has increased by 12% year-on-year, according to new figures.
Nearly 400 more personal insolvencies were reported between July and September this year compared to the same period in 2018, Accountant in Bankruptcy’s latest official statistics show.
It found there were 3,466 personal insolvencies, consisting of bankruptcies and protected trust deeds (PTDs), in the second quarter of 2019-20 compared to 3,077 for 2018-19.
A total of 1,178 bankruptcies were recorded in the quarter, a 1.6% increase, while 751 debt payment programmes (DPPs) were approved under the Debt Arrangement Scheme (DAS), compared with 636 in the same quarter of 2018-19.
Elsewhere, 235 registered companies in Scotland became insolvent during those three months – a slight increase on the 232 in the same three months in 2018-19.
There was a 17.6% increase in voluntary liquidations (solvent liquidations) in the second quarter of this financial year, with 127 members opting for dissolution compared with 108 in the same period of 2018-19.
Tim Cooper, chairman of insolvency and restructuring trade body R3 in Scotland, said firms north of the border “still face a lot of headwinds”.
He said: “This is the second quarterly fall in a row, in defiance of a general upward trend since the start of 2017 – but the Scottish corporate insolvency numbers have been bouncing around a fair bit from quarter to quarter, reflecting a generally unsettled working environment for businesses.
“Brexit uncertainty has, of course, been something Scottish businesses have had to deal with for some time but it’s not the only challenge businesses are facing.
“Despite the quarterly fall, insolvency numbers are slightly higher than they were this time last year.
“The Accountant in Bankruptcy’s numbers also don’t cover the full range of corporate insolvency procedures available in Scotland.”
He added: “The manufacturing sector contributed to a fall in Scotland’s GDP over the second quarter as stockpiling activity softened following the missed EU departure date of March 29.
“Businesses which had built up supplies in preparation were left with plenty of stock to hand, reducing demand.
“And Scotland’s manufacturers face fresh challenges in the form of a potential trade spat with the US, which may have an impact on our flourishing whisky sector.
“However, demand for blends and single malts from the rest of the UK – and the rest of the world – remains strong and should help to compensate for any loss of US business.”
