THE number of less affluent Scots going bust has risen 7.8%, new figures have revealed.
The number of sequestrations, the bankruptcy option for the poorest involving the forced transfer of assets and property, rose from 2493 in the final quarter last year to 2687, in the first quarter of 2011.
However, there was a 24.6% quarter-on-quarter fall in the number of those taking the Protected Trust Deed (PTD) route to bankruptcy – usually taken by more affluent debtors – from 2090 to 1575, according of the Accountancy in Bankruptcy data. It has meant that the overall number of Scots going bust has fallen by 7%.
R3, the trade body for Insolvency Professionals said the figures “would tend to indicate that the recession is now hitting the less well off in society”.
Analysts said the drop of 515 in PTD bankruptcies was eclipsed by the 555 who took the new Certificate of Sequestration route to going bust. Introduced in November, last year, this provided less affluent debtors with an easier route to declare themselves bankrupt, with a one-year discharge period rather than three for PTDs.
Bryan Jackson, corporate recovery partner with accountants and business advisers PKF, welcomed the drop in the overall number of personal bankruptcies but warned that there may be rises to come.
“While the personal insolvency numbers may have fallen there is still a considerable number of Scots living in a state of severe indebtedness which remains unresolved but which will eventually spill out over the next year or so,” he warned.
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