Accountant in Bankruptcy Scottish Insolvencies in the Firstquarter of 2010/11
ACCOUNTANT IN BANKRUPTCY
SCOTTISH INSOLVENCIES IN THE FIRSTQUARTER OF 2010/11
These statistics show insolvencies in the first quarter of year ending 31/03/11, published 21July 2010, by Accountant in Bankruptcy. Figures are collated to 30 June 2010.
The number of Debt Payment Programmes approved under the Debt Arrangement Scheme (DAS) is also reported.
PERSONAL INSOLVENCIES
Personal insolvency data consists of both bankruptcy and Protected Trust Deed (PTD) figures.
There were 5,378 personal insolvencies in Scotland in the firstquarter of 2010/11. This figure represents an increase of 4 per cent on the previous quarter and a decrease of 15 per cent on the same period in the previous year.
In total there were 3,139 awards of bankruptcy, showing no change on the previous quarter and a decrease of 16 per cent on the same period in the previous year.
The number of Protected Trust Deeds recorded was 2,239in total, an increase of 10 per cent on the previous quarter and a decrease of 13 per cent on the corresponding quarter of last year.
Chart 1: InsolvenciesinScotland
The individual awards of bankruptcy were broken down as follows:
- 2,500 awards were made as a result of debtor applications to the Accountant in Bankruptcy, an increase of 1 per cent on the previous quarter and a decrease of 17 per cent on the same quarter last year. Of these, 1,897were awarded bankruptcy through LILA **
- 562 awards resulted from petitions to the courts by creditors, a 1 per cent decrease on the previous quarter and a decrease of 9 per cent on the same quarter last year
- 77 awards were made as a result of petitions to the court by trustees in a trust deed. This represents a 13 per cent decrease on the previous quarter and a 21 per cent decrease on the same quarter last year
** The Low Income, Low Asset (LILA) route into bankruptcy allows people who meet the relevant criteria to apply for their own bankruptcy without proving apparent insolvency or having creditor concurrence. The Bankruptcy and Diligence etc. (Scotland) Act 2007 introduced the LILA route and has widened access to bankruptcy and consequently no direct comparison should be drawn between bankruptcy figures after the introduction of LILA and thosereported previously.
Table 1: Personal InsolvenciesbyQuarter
p1 – Provisional figures for 2009/10 will be revised in line with the 2009/10 Annual Report. The revisions will take account of late notifications of award from both creditor and trust deed petitions.
p2 - Figures for 2010/11 will remain provisional until validation following the end of the financial year.
Table 2: Personal Insolvencies byFinancial Year
Note: LILA route to bankruptcy introduced at start of 2008/09 financial year.
DEBTOR APPLICATIONS
The Accountant in Bankruptcyreceived 2,610 debtor applicationsfor bankruptcy in the first quarter of 2010/11. At the end of the quarter223 applications were still being processed. During the quarter144applications were rejected as the criteria for bankruptcy had not been demonstrated and 11were returnedmainly due to incorrect completion.
CASE ADMINISTRATION
In Scotland, a trustee is appointed to administer each bankruptcy. A nominated insolvency practitioner may be appointed as trustee or the Accountant in Bankruptcy may be appointed. For thefirst quarter of 2010/11 the Accountant in Bankruptcy was appointed trustee in 2,895 casesawarded, representing 92 per cent of bankruptcies for the quarter.
DEBT ARRANGEMENT SCHEME
During the quarter there were 495 Debt Payment Programmes approved, an increase of 19 per cent on the previous quarter and an increase of 60 per cent on the same quarter in the previous year.
Table 3: Debt Payment ProgrammesbyQuarter
COMPANY LIQUIDATIONS AND RECEIVERSHIPS
Receiverships and liquidations are of those companies which the Court of Sessions has jurisdiction to wind up, and are recorded in the Register of Insolvencies (RoI).
The Accountant in Bankruptcy received 304 notices of Scottish registered companies becoming insolvent or entering receivership in thefirst quarter of 2010/11. This figure includes22 receiverships, 210compulsory liquidations,72creditors voluntary liquidations and 51 members voluntary liquidations.
Accountant in Bankruptcy has reviewed the collection of data for company liquidations. Previously published figures up to and including the third quarter of 2008/09 are based on the registration of notice of the appointment of liquidator, including provisional liquidators. The figures for the fourth quarter of 2008/09 onwards are based on court orders for compulsory liquidations and consequently are a more accurate statement of compulsory liquidations recorded in the RoI. However, the figures for 2009/10 should not be directly compared with the published figures for 2008/09.
Table 4: Company Liquidations and Receiverships
r –revised figures - 1 CVL had been recorded in the incorrect quarter. Q1 09/10 previously showed 58, Q2 showed 49.
Notes
The Accountant in Bankruptcy supervises all personal insolvencies in Scotland and administers those bankruptcies where appointed. Insolvent individuals in Scotland are subject to bankruptcy (sequestration) or enter Protected Trust Deeds (PTDs) under the Bankruptcy (Scotland) Act 1985. The 1985Act was amended by the Bankruptcy (Scotland) Act 1993 andon 1 April 2008, part 1 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 came into force making significant changes to some aspects of bankruptcy in Scotland. Changes included the introduction of LILA, a route into bankruptcy for people with low income and low assets. The changes also took a number of processes out of the Scottish Court system, reducing costs and freeing up court time.
PTDs are voluntary arrangements, where the debtor passes his estate to an insolvency practitioner who arranges to repay part of the debt to creditors on the debtor’s behalf. This is similar to Individual Voluntary Agreements (IVAs) in England and Wales, although there are important differences in the way they are set up and administered.
The Debt Arrangement Scheme (DAS) is administered by the Accountant in Bankruptcy. Debt Payment Programmes approved under DAS allow individuals to repay their debts in full over an extended period of time whilst providing protection from enforcement by their creditors and safeguarding their home as long as mortgage payments are maintained. The legislation relating to DAS is contained in the Debt Arrangement and Attachment (Scotland) Act 2002 and subsequent regulations.
The Accountant in Bankruptcy is also responsible for receiving, extracting and recording information from certain forms relating to company liquidations and receiverships. The legislation appropriate to liquidations and receiverships is contained in the Insolvency Act 1986 and the Insolvency (Scotland) Rules 1986.
Details of bankruptcies, PTDs, liquidations and receiverships are found on the register of insolvencies, which is maintained by the Accountant in Bankruptcy. Further information on DAS, including a register of DPPs, is available at
Further information regarding insolvency in Scotland, including legislation, can be found on the Accountant in Bankruptcy website at
Accountant in Bankruptcy
21July 2010