Protected trust deed statistics released

The Accountant in Bankruptcy has today released updated statistics for personal insolvency in Scotland. The figures, including information on protected trust deeds and the Debt Arrangement Scheme, cover the second quarter of their 2011/2012 reporting year.

In total there were 5378 personal insolvencies in Scotland during the quarter. This total includes bankruptcy and protected trust deeds. In comparison to the previous quarter the numbers have increased by 1%, and in comparison to the same quarter last year the numbers have increased by 4%. Some observers will conclude that this level of increase is surprisingly low considering the considerable mounting financial pressure on individuals throughout Scotland.

Bankruptcy numbers are actually in decline. There were 2852 bankruptcies in total during the period which is down a little on the previous quarter and down by 8% compared to the same period last year. 82% of these bankruptcies were initiated by the debtor themselves, with 18% being initiated by creditors or by the Trustee of a trust deed. During the quarter there were a total of 70 bankruptcies initiated by the Trustee in connection to a protected trust deed. More than 1000 of the total number of bankruptcies were under the LILA (low income low asset) criteria.

The number of protected trust deed cases during the quarter was 2526. This is an increase of 22% compared to the same quarter last year. While bankruptcy numbers appear to be in retreat, the number of people using a protected trust deed to address their debt difficulties is accelerating quickly.

As previously predicted by this website, the number of people using the Debt Arrangement Scheme is growing quickly. The nunbers are up by 33% compared to the previous quarter and by 72% compared to the same period last year. The Debt Arrangement Scheme is an excellent alternative to a protected trust deed where issues with assets make it unsuitable. The Debt Arrangement Scheme also offers certainty and protection well in excess of that offered by the better known informal “debt management plan”. It would seem that awareness of this scheme is growing rapidly thanks, in part, to the growing involvement of the commercial debt resolution industry (including some protected trust deed firms) in it’s provision. 

Fergus Ewing, Minister for Energy, Enterprise and Tourism, referred to the successful introduction of the Certificate for Sequestration in his comments about the statistics,

“Personal insolvencies for this period have increased slightly while bankruptcy awards have gone down which may be attributed to the increase in the number of protected trust deeds as well as the success of the Certificate for Sequestration, introduced in November 2010 to give much needed debt relief to individuals who previously didn’t qualify”.

It would seem that the Scottish Government and the Accountant in Bankruptcy are due credit for some of the recent changes applicable to debt solution availability in Scotland. The Debt Arrangement Scheme, which clearly offers significant benefits to many debtors that prefer to avoid insolvency, is finally gaining some traction and increased public awareness. The Certificate for Sequestration has removed a blockage in the system that previously left some people unable to escape from debt or tempted them into signing up to unaffordable protected trust deeds.