PERSONAL bankruptcies have reached their lowest level in over six years, figures show.
Total personal insolvencies rose slightly (0.8 per cent) in July to September on the previous quarter on the back of a 10 per cent rise in protected trust deeds (PTDs), where an affordable repayment to creditors is agreed as an alternative to bankruptcy.
However, the Accountancy in Bankruptcy figures also showed personal insolvencies were 12.5 per cent down on the same quarter last year, and have been on a downward trend since insolvency was opened up to people with low income and low assets in April 2008.
The number of people who have avoided insolvency through official Debt Arrangement Scheme (DAS) is down 8.3 per cent from the previous quarter, down 1.2 per cent on the previous year.
Enterprise Minister Fergus Ewing described the figures as "encouraging", but business advisers BDO LLP said the slight rise in insolvencies "may indicate a bottoming out in the personal insolvency numbers to a level which will remain fixed for some years." There were 2,991 personal insolvencies recorded in Q2 2014, including 1,654 awards of bankruptcy and 1,337 PTDs, while 1,156 DAS cases were approved recouping £9.4 million for creditors.
The combined number of bankruptcies, PTDs and DAS approvals totalled 4,147, which is 9.6 per cent lower than last year.
Bryan Jackson, business restructuring partner at BDO, said: "There has been a growth in personal indebtedness over the last 15 to 20 years which would have once been seen as extraordinary but has now become acceptable. One of the unfortunate side effects is that some individuals are unable to cope with high levels of debt and fall into insolvency."
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