The number of bankruptcies awarded in Scotland was down 44% in 2015-16, and down for the seventh year in a row, according to the annual report of the Accountant in Bankruptcy (AiB), published yesterday.
The report reveals that 3,765 bankruptcies were awarded during the year, down from 6,730 the previous year and nearly 15,000 in 2008-09, in the depth of the recession. Of the latest total, which represents 84. bankruptcies per 10,000 adults in Scotland, 2,593 were debtor applications and 1,170 creditor petitions; the remaining two were trustee petitions. There were 8,852 discharges.
AiB was the nominated trustee in 80% of cases, and the £15.2m paid out to creditors represents an average dividend of 29.3p in the pound.
In addition, 4,709 protected trust deeds were registered, up 6.1% on 2014-15, making 10.6 per 10,000 adults, and 7,298 discharged. These paid out a total of £30.7m, giving an average dividend of 23.4p in the pound. The number of debt payment programmes approved under the Debt Arrangement Scheme fell by just over half, to 2,041, and with 1,297 programmes completed there were 13,766 llive at the end of the year, covering a total of £249.7m of debt, of which £37.8m was repaid during the year.
Despite the reduced number of cases, AiB has again recovered its costs from fees charged, for the third year running, and received a positive external audit report from Audit Scotland. It spent £12.2m, which was funded in full by income generated from fees and charges of £12.7m. The report notes:
"In the last two years, a large number of historic bankruptcy cases have been repaying the public purse for costs incurred by the Agency in previous years which has resulted in strong income levels. In addition, the volume and associated cost of new bankruptcy cases have been significantly lower than in previous years. Together, these factors have resulted in the financial statements showing a surplus for the last two years."
Regarding AiB's current priorities it comments: "The Bankruptcy and Debt Advice (Scotland) Act 2014 brought in wide-ranging policy changes set out in earlier annual reports, and came into force in full on 1 April 2015. This year has therefore been about developing the systems and processes necessary to deliver those policy changes in practice. Developments on the policy side have been limited, with a major programme of work to consolidate the last decade of legislative changes and a start on modernising corporate insolvency rules. The coming year will see further work undertaken to consolidate and simplify the suite of subordinate regulations to complete the consolidation of the primary legislation, alongside the completion of the corporate insolvency work."