While bankruptcies dropped from 11,056 in 2011-12 to 8838 in 2012-13, there was a rise of almost 40% in the number of people using approved debt payment programmes (DPPs) under the Debt Arrangement Scheme (DAS) to repay what they owe, according to the annual report of the Accountant in Bankruptcy.
There were 4632 DPPs approved last year, 39.6% more than in 2011-12 and more than 10 times the total from five years ago, with 442 of the payment programmes approved in 2007-08.
And the number opting for the voluntary protected trust deed - usually taken by more affluent debtors to help write off their debts - dropped by 11% from 9194 to 8177 year-on-year.
In all some 21,647 made a debt application in 2012-13, compared to 23,569 the previously year - a fall of 8.9%.
The AiB said: "We cannot say that the fall in insolvencies can be directly attributed to the rise in DAS, but it is encouraging that whilst demand for insolvency products is decreasing, DAS numbers have continued to grow substantially and this is due to improvements made to DAS by the Scottish Government and a successful advertising campaign that raised awareness of the scheme."
Some 2798 took out a Certificate for Sequestration which was introduced in November 2010 - a 9.4% drop year-on-year.
The report also showed a 25.3% drop in the number of companies going into receivership and liquidation.
There were a total of 1022 liquidations and receiverships recorded in 2012-13, a fall from 1369 the year before.