THE number of Scots going bust has fallen by more than a quarter in the last year, despite a rise in the past three months.

Personal insolvencies have been on a downward trend in recent years and the latest figures from the Accountant in Bankruptcy show a 28.6% drop between the second quarter of last year and this year.

But figures were up 14.7% in April to June compared with the start of the year, with a large increase in the number of Protected Trust Deeds, a voluntary arrangement where a debtor passes his estate to an insolvency practitioner to repay part of the debt.

There were 2038 PTDs in April to June, up from 1652 the previous quarter, and 1961 sequestrations, compared with 1834 in January to March.

Bryan Jackson, business restructuring partner with BDO LLP, said there was concern that the "pent-up indebtedness of many individuals has burst through".

He said the problem was being exacerbated by payday and short-term lenders and it was affecting "all aspects of Scottish society", from the more affluent to the less well-off,

"There is little doubt that many individuals have been living from month-to-month, or week-to-week, simply feeding the interest on their debts rather than reducing the debt itself," he said.

"This has delayed some from falling into insolvency, but this quarter's figures suggest their financial situation has deteriorated beyond the point where they could cope."

Enterprise Minister Fergus Ewing described the year-on-year decline in personal insolvencies as "encouraging",

He said: "The Scottish Government has been taking significant measures to meet the very difficult challenges faced by those who are experiencing financial hardship.

"The Debt Arrangement Scheme, an important part of this vision, has been strengthened to aid even more people in Scotland.

"The new system will ensure the rights of those in debt are balanced with the needs of creditors and businesses and that those having to deal with the burden of debt are made aware of the need for appropriate advice."