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Accountant in Bankruptcy

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Publication - Statistics

Scottish Statutory Debt Solutions Statistics: Annual edition

First published
2 August 2023
Last updated
2 August 2023 - see all updates
Topics
Debt Arrangement Scheme, Protected Trust Deeds, Bankruptcy, Corporate Insolvency

An experimental statistics publication for Scotland

Supporting documents

Discharge from bankruptcy

A debtor in a bankruptcy will normally be bankrupt for one year. After this period they may be discharged. Although the debtor is discharged, the administration of the bankruptcy continues until the trustee has dealt with all of the estate and accounted for their work so that they can seek their own discharge. A debtor must continue to cooperate with the trustee until the trustee’s discharge.

Table 2 shows that, in 2022-23 there were 2,797 bankruptcies discharged (based on discharge of the trustee), a 27.1% decrease on the previous year.

Table 2: Number of bankruptcies concluded by financial year and type of bankruptcy
Financial year of the trustee discharge date 2018-19 2019-20 2020-21 2021-22 2022-23 Annual change (%)
Creditor and trust deed petitions 1,097 797 728 650 415 -36.2%
Debtor applications 4,518 4,157 3,509 3,188 2,382 -25.3%
of which debtor application: Minimal Asset Process 1,992 2,146 1,694 1,571 1,514 -3.6%
of which debtor application: Full Administration 2,526 2,011 1,815 1,617 868 -46.3%
Total number of bankruptcies concluded 5,615 4,954 4,237 3,838 2,797 -27.1%
Source: Accountant in Bankruptcy

When the trustee in a bankruptcy is discharged, any funds gathered in respect of debts are divided among the creditors depending on the type of debt included in the bankruptcy. Secured debt is backed by some form of collateral, for example, secured debt over property. Preferred debt is payable before ordinary and postponed debts in a bankruptcy, PTD, or the winding up of a company.

It should be noted, however, that the protected status of many preferred creditors was abolished following revisions to the legislation in September 2003. Ordinary debt is any other type that is not preferred or secured.

Table 3 shows the number of awards concluded during 2022-23 and the dividend outcome of the discharged cases.

Table 3: Balance of bankruptcy cases by financial year and whether a dividend was payable or not
Financial year 2018-19 2019-20 2020-21 2021-22 2022-23
Live cases at the start of the financial year 10,009 9,267 9,061 7,155 5,622
New awards of bankruptcy 4,873 4,748 2,331 2,305 2,357
New discharges of bankruptcy 5,615 4,954 4,237 3,838 2,797
of which: Recalls 44 73 34 41 48
of which: Discharged Minimal Asset Process (no dividend) 1,992 2,146 1,694 1,571 1,514
of which: No dividend was payable 2,518 1,950 2,050 1,672 866
of which: Dividend payable to preferred creditors only 2 2 0 1 0
of which: Dividend payable to ordinary creditors 1,059 783 462 548 371
Live cases at the end of the financial year 9,267 9,061 7,155 5,622 5,182
Source: Accountant in Bankruptcy

Of the bankruptcies concluded by discharge of the permanent trustee, 70.0% resulted in no dividend payable to creditors and 30.0% resulted in a dividend payable to ordinary creditors only. This includes cases where a dividend could be payable and therefore excludes MAP cases.

If all bankruptcy cases that concluded by discharge of the trustee in 2022-23 are considered, including MAP cases, a dividend was paid to ordinary creditors in 13.3% of cases.

Around 48.0% of cases where ordinary creditor dividends were paid resulted in a dividend of less than 25 pence in the £, which is less than the 55.1% of cases in 2021-22. Furthermore, 26.4% of cases were paid at 100 pence in the £ plus interest, which is more than the 18.8% of the cases in 2021-22.

For all cases in which a dividend was payable, the mean dividend paid to creditors for all cases including those with zero dividends was 13.1 pence in the £, compared with 9.2 in 2021-22. In cases where The Accountant was appointed as trustee, the mean dividend was 18.1 pence in the £, compared with 7.6 pence in the £ for cases where a private sector trustee was appointed. Dividends are affected by the realised value of estate.

The above figures reflect the overall return to creditor as a proportion of the total debt claimed - these are equivalent to previous figures contained in the AiB Annual reports although these have been labelled as “Average dividends paid to creditors”.

Contracted out insolvency services

The Insolvency Service Framework allows AiB to use external providers to administer bankruptcy cases on its behalf, where The Accountant has been appointed trustee.

In 2022-23, 710 cases were contracted out and 708 contracted out cases were discharged. Of these discharged cases, 346 (48.9%) were cases with assets realised.

Further information on these cases including the value of assets realised and the expenses on realisation are shown in the accompanying tables. Note, these figures are rounded to the nearest thousand pound, and totals may not equal the sum of the constituent parts due to rounding.

The total value of assets realised was around £11.9 million. Heritable assets, which are properties in the form of land, houses, and buildings that become heritable by accession made up around 63.5% of the value of all assets realised. Ingathered contributions and funds made up 32.2% of the value of all assets realised.

The total expenses of realisation was around £2.7 million, the majority of which was made up of expenses on secured assets.

First published
Wednesday, 2 August 2023
Last updated
Wednesday, 2 August 2023 -
All updates

  1. Statistics published

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