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Scottish Statutory Debt Solutions Statistics: Annual edition

An experimental statistics publication for Scotland

Awards of bankruptcy

Bankruptcy (also known as sequestration in Scotland) is a legal declaration that a person cannot pay their debts. If a person is declared bankrupt, control of some things that they own are passed to a trustee who may sell them to pay money owed to creditors.

Table 1 below shows a high level summary of bankruptcies in Scotland, broken down by type of bankruptcy and type of trustee organisation. There were 2,357 bankruptcies awarded in 2022-23, an increase of 2.3% when compared with 2021-22.

Table 1: Number of awards of bankruptcy by financial year and type of bankruptcy
Financial year of the awarded date 2018-19 2019-20 2020-21 2021-22 2022-23 Annual change (%)
Creditor petitions 994 910 164 136 331 143.4%
of which trustee: AiB 787 654 101 106 254 139.6%
of which trustee: Insolvency practitioner 207 256 63 30 77 156.7%
Trust deed petitions 10 5 0 0 0 [z]
of which trustee: AiB 5 2 0 0 0 [z]
of which trustee: Insolvency practitioner 5 3 0 0 0 [z]
Debtor applications 3,869 3,833 2,167 2,169 2,026 -6.6%
of which trustee: AiB 3,363 3,291 1,964 1,975 1,895 -4.1%
of which trustee: Insolvency practitioner 506 542 203 194 131 -32.5%
of which debtor application: Minimal Asset Process 2,181 2,020 1,514 1,536 1,404 -8.6%
of which debtor application: Full Administration 1,688 1,813 653 633 622 -1.7%
Total awards of bankruptcy 4,873 4,748 2,331 2,305 2,357 2.3%
Source: Accountant in Bankruptcy



Chart 3 shows the number of bankruptcies awarded by type between 2015-16 and 2022-23. This chart shows that the Minimal Asset Process (MAP) represents the majority of debtor application bankruptcies awarded sine 2015-16.

Note: [z] Not applicable as percentages have not been calculated where numbers are small or a data point is simply not applicable.

Awards of bankruptcy can be grouped into three types:

  • debtor application - application made by the debtor to The Accountant in Bankruptcy
  • creditor petition - applications to the court by a creditor to pursue the sequestration of a debtor
  • trust deed petition - applications where the trustee under a trust deed has applied to the court for the debtor’s sequestration

The majority (86.0%) of bankruptcies were initiated through debtor applications. The number of bankruptcies awarded through debtor applications decreased by 6.6% in 2022-23 when compared with 2021-22.

Awards of bankruptcy through creditor petitions increased by 143.4% from 136 in 2021-22 to 331 in 2022-23. There were no trust deed petitions awarded in 2022-23.

Chart 3 below shows the recent trend in bankruptcies by type since 2015-16. The total awards of debtor applications have decreased by 21.9% in 2022-23 when compared with 2015-16. Therefore, the 2022-23 level remains below levels between 2015-16 and 2019-20.

Type of debtor applications

In 2022-23, there were 2,026 awards of bankruptcy arising from debtor applications.

There are two types of debtor applications for bankruptcy - Minimal Asset Process (MAP) or Full Administration. In 2022-23, around 69.3% of bankruptcies awarded through debtor applications were MAP cases with the remaining cases being Full Administration.

MAP bankruptcy replaced the Low Impact Low Asset (LILA) route in April 2015. The number of LILA bankruptcy awards followed the declining trend in overall bankruptcies since 2008-09. There was a spike in activity in April to June 2012 - likely as a result of the scheduled increase in fees to access bankruptcy being introduced on 01 June 2012. The introduction of the Bankruptcy and Debt Advice (Scotland) (BADA(S)) Act 2014 in April 2015, was most likely cause for the sharp decline in the number of bankruptcies awarded in April to June 2015.

Not all debtor applications for bankruptcy result in an award being made and applications can be rejected (criteria for bankruptcy not met) or returned (application errors).

Applications for bankruptcy showed a small decrease in 2022-23 when compared with the previous year. In 2022-23, 2,085 applications for bankruptcy were received by AiB, compared with 2,279 in 2021-22.

Awards of bankruptcy by trustee appointment

In Scotland, a trustee is appointed to administer each bankruptcy. The Accountant in Bankruptcy (The Accountant) will be the trustee unless an Insolvency Practitioner (IP) is nominated to act. The Accountant is appointed as trustee in all MAP cases as there is no estate or contributions to be administered - this was previously the case under LILA.

In 2022-23 the Accountant was appointed as trustee in 91.2% of bankruptcies awarded, compared with 90.3% of bankruptcy awards in 2021-22. In the remaining 8.8% of cases, an IP was the nominated trustee in 2022-23.

The Accountant does not seek appointment as trustee in bankruptcies in Scotland but may be appointed as a default trustee if no other nomination is made.

The number of cases where The Accountant was appointed as trustee was 2,149, an increase from 2,081 in 2021-22. The number of cases where an IP was appointed trustee decreased from 224 in 2021-22 to 208 in 2022-23.

Awards of bankruptcy by local authority area in 2022-23

The number of bankruptcies awarded can be shown by local authority areas, based on the applicant’s postcode. Using the estimated adult population (aged 16+) of each local authority, the number of bankruptcies per 10,000 adults can be calculated, providing a representative picture of the concentration of bankruptcies in Scotland.

Several elements such as access to debt advice, social perception of debt or ease of access to credit can affect the uptake of statutory debt solutions (bankruptcies awarded, PTDs registered and DAS DPPs approved). Consequently, the figures presented in this report cannot be regarded as evidence of the level of indebtedness or economic performance in any particular local authority.

The rate of bankruptcies per 10,000 adults in Scotland was 5 in 2022-23, the same rate as in 2021-22.

Local Authority Chart 1 and the associated heatmap that depict bankruptcy rates show that West Lothian was the local authority with the highest rate of bankruptcies per 10,000 adults in Scotland. West Dunbartonshire was the local authority area with the second highest rate of bankruptcies. Stirling and Dumfries & Galloway were with the lowest and second lowest rate of bankruptcies.

Awards of bankruptcy (and for other statutory debt solutions) by local authority and for previous years are available in the accompanying tables.

Local Authority Chart 1 shows the top and bottom three rates of bankruptcy per 10,000 adults in 2022-23. This chart shows that West Lothian has the highest rate per 10,000 adults.

Heat Map 1 shows the awards of bankruptcy rates in each local authority in 2022-23 by grouping intervals of 5. This heat map shows that West Lothian is in one of the highest groupings.


Bankruptcy Restriction Orders and Bankruptcy Restrictions Undertakings

Bankruptcy Restriction Orders (BROs) and Bankruptcy Restrictions Undertakings (BRUs) were introduced by The Bankruptcy and Diligence etc. (Scotland) Act 2007 and came into force on 01 April 2008. BRUs were subsequently abolished from April 2015 by the BADA(S) Act 2014, and hence there were no BRUs granted since 2016-17.

The purpose of BROs is to provide a level of protection to businesses and consumers from individuals that have demonstrated misconduct or recklessness before or after the date of bankruptcy. These individuals are held accountable for their actions by the imposition of bankruptcy restrictions for an extended period of time. BROs for a period of between two, but less than five years are imposed by AiB while BROs of a longer duration require an application through the court.

Restrictions are imposed in relatively small numbers when compared with the overall caseload of AiB. In 2022-23, there was a decrease in BROs granted from 8 in 2021-22 to 2 in 2022-23. The BADA(S) Act which came into force in 2015 conferred a new power on AiB to withhold the discharge of non-cooperating bankrupts. This change has contributed to the reduction of BRO volumes in recent years.

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