THE proportion of people in Scotland declared insolvent last year was almost double the rate of the rest of Britain, new figures reveal.

The insolvency figures show 19,634 people went bust in Scotland during 2011 – 0.38% of the population. In England and Wales 0.22% of the population, or 119,850 people, were made bankrupt.

Accountancy and business advice firm PKF, which compiled the report, warned that it was "hard to see" the levels of personal insolvencies changing with house prices remaining static or falling, wages frozen and unemployment rising.

Bryan Jackson, the firm's corporate recovery partner, warned: "The real concern is where will it all end? I believe that we have several more years of similar numbers of Scots falling into insolvency before we escape these difficult economic times."

Citizens Advice Scotland said the figures were "truly shocking" and said it had dealt with 400 debt cases every day last year, 30 more than for each day in 2009.

Susan McPhee, Head of Policy, said: "It's important to remember also that every individual one of these cases is a personal tragedy, and a family whose finances have been wrecked – with all the stress and misery that comes with that.

"Nobody wants to become bankrupt. It is not a soft option, and never an easy decision for anyone. Unfortunately, for many people at the moment, their finances are in such a bad way that it is their only realistic option.

"What is vital is that people get advice before they take such a course."

John Dickie, head of the Child Poverty Action Group in Scotland called for a strong welfare system to support families suffering from the economic downturn.

He said: "There's no question that a stalling economy and rising process are having a massive impact on households of all kinds, with current tax and benefit policies hitting families hardest and poorer families hardest of all.

"Instead of driving through damaging welfare cuts, the UK government needs to set about building a decent system of social security so that all of us are protected through hard times, whilst in Scotland it is vital that all our families have access to high-quality advice to help maximize their incomes and manage their debts."

Peter Kelly, director of the Poverty Alliance, added: "These new figures underline the serious difficulties that many families in Scotland now face.

"Despite the fall in bankruptcies over last year we should be in no doubt that the situation will get worse for many people over the coming period.

"It is vital people are given the support they need to avoid the problems that will lead to bankruptcy. This means ensuring that there are local, free advice services available when they need them most. Without this last line of defence many more people will find themselves plunged into poverty."

The number of sequestrations, the Scottish term for bankruptcies, north of the Border last year fell by 3.4% compared with 2010, when 20,329 went bust, although 2011 still had the fourth highest number of personal insolvencies ever recorded.

The study found the north-south divide in bankruptcy rates is narrowing. In 2010, personal insolvency rates in Scotland (0.41%) were two-thirds higher than in England and Wales (0.25%).

PKF said the last four years were the highest-ever figures for personal sequestrations in Scotland, with 2009 the worst. It said the figure for the number of Protected Trust Deeds (PTDs) issued in Scotland last year is the second highest ever, at 8522.

This is a legal procedure which allows debts to be repaid over a specified period of time. The last three years are said to have seen the three highest-ever figures for PTDs in Scotland.