Legislative changes

During the COVID-19 Pandemic there was a series of emergency legislation introduced that may impact our statistics:

• The Coronavirus (Recovery and Reform) (Scotland) Act

• The Bankruptcy (Miscellaneous Amendments) (Scotland) Regulations 2021

and more recently:

• The Bankruptcy and Debt Arrangement Scheme (Miscellaneous Amendment) Regulations 2023

Debtor applications

Debtor applications for bankruptcy decreased by 9.9% from 485 in 2023-24 Q2 to 437 in 2024-25 Q2. There are two types of debtor applications for bankruptcy: MAP or Full Administration. Full Administration bankruptcies decreased by 12.1% from 157 in 2023-24 Q2 to 138 in 2024-25 Q2. MAP bankruptcies decreased by 8.8% from 328 to 299. The majority of bankruptcies awarded through debtor applications are MAP cases.

Not all debtor applications for bankruptcy result in an award being made. Applications can be:

• rejected (criteria for bankruptcy not met)
• returned (application errors) or
• withdrawn

In 2024-25 Q2, 437 debtor applications for bankruptcy were received by AiB compared with 485 received in 2023-24 Q2.

Almost 70% of debtor applications awarded in 2024-25 were MAP
Chart 3: Awards of debtor applications by type of bankruptcies: Apr-Jun 2009 to Jul-Sep 2024

Case administration

In Scotland, a trustee is appointed to administer each bankruptcy. The Accountant in Bankruptcy (The Accountant) will be the trustee unless an insolvency practitioner is nominated to act. In all cases awarded under MAP, The Accountant must act as trustee.

In the second quarter of 2024-25, The Accountant was appointed trustee in 488 cases awarded. This is 86.5% of bankruptcies for the quarter. This is because 68.4% of bankruptcies awarded through debtor applications in this quarter are MAP cases.

Application fee structure

The current bankruptcy application fee structure provides lower cost access to both the Full Administration and MAP routes to bankruptcy. It included the complete removal of fees for those assessed as having no surplus income and those in receipt of certain prescribed benefits. Debtor application costs for Full Administration have reduced from £200 to £150 and MAP application fees have been removed completely. For further information see:

• The Bankruptcy and Debt Arrangement Scheme (Miscellaneous Amendment) (Scotland) Regulations 2023

• The Bankruptcy (Miscellaneous Amendments) (Scotland) Regulations 2021

In the second quarter of 2024-25, a total of 437 bankruptcy awards were made following applications submitted to AiB under the revised fee structure. Of this total, 414 (94.7%) applicants were not required to pay any fee at all. 83.3% of Full Administration bankruptcies paid no fee in 2024-25 Q2. Due to the legislation changes 100% of MAP cases paid no fee in 2024-25 Q2.

Bankruptcies discharged

A debtor in a full administration bankruptcy will normally be bankrupt for one year. After this period they may be discharged. A debtor in a MAP bankruptcy will normally be discharged after six months as long as they continue to meet the MAP criteria.

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.

In 2024-25 Q2, there were 530 debtors discharged and 610 trustees discharged, a decrease of 13.7% and 3.5% respectively when compared with 2023-24 Q2.

Figures on the number of trustee discharges contain some bankruptcy cases where the trustee has been discharged on more than one occasion. This is following formal re-appointment to conclude the administration of the bankruptcy. The figures also include the number of trustees who formerly acted in bankruptcies on which recall has been granted. In 2023-24 and 2024-25, there were 50 and 25 bankruptcy recalls respectively.

PTDs registered

There were 1,327 PTDs registered in 2024-25 Q2, a decrease of 11.8% when compared with 2023-24 Q2. Chart 4 shows that the number of PTDs have followed a similar trend to bankruptcies and had been generally increasing between 2014-15 Q1 and 2019-20 Q1, before declining in 2019-20 Q2.

Despite a drop in volumes in COVID-19, there are still more PTDs than bankruptcies
Chart 4: Personal insolvencies by type of debt solution Apr-Jun 2015 to Jul-Sep 2024

As with awards of bankruptcies, the trend in PTDs registered is likely to be affected by legislative and operational changes. For example, the BADA(S) reforms, introduced from 1 April 2015, aligned the payment period in bankruptcy and PTDs to 48 months. Prior to this, those agreeing to a PTD were typically paying contributions for an additional year compared with those in bankruptcy. These changes have likely led to an increase in PTD activity levels.

In 2024-25 Q2, more PTDs were registered than bankruptcy awards, as has been the case since 2015-16 Q1.

PTD Protocol

The PTD Protocol was introduced on the 1st October 2021. It set out non-statutory changes to operational processes. The aim was to promote good practice, improve transparency and provide further clarity in support of the AiB PTD Notes for Guidance. This would better enable Insolvency Practitioners to manage debtor and creditor expectations in a PTD.

There is no legislative need for a trustee to follow the protocol provisions. Yet, since its launch, eight insolvency practitioners voluntarily agreed to do so. Of the total number of trust deeds protected in 2024-25 Q2, 93% had protocol compliant trustees.

More details on the protocol can be found on the AiB website.

PTDs discharged

A debtor in a PTD is normally discharged after 48 months. If the debtor makes the agreed payments, and cooperates with the trustee then the trustee will apply to AiB for the debtor to be discharged.

After the debtor has been discharged, the trustee may remain in office as long as necessary to conclude the administration of the trust deed.

There were 1,335 debtors discharged in the second quarter of 2024-25, a 25.5% decrease when compared with 2023-24 Q2. There were 1,484 trustees discharged in 2024-25 Q2, a 6.3% decrease when compared with the same quarter in 2023-24.

Approved DAS applications

Note that not all applications received by AiB are approved. In the second quarter of 2024-25, 1,339 applications for a DAS DPP were received by AiB. In the same quarter, 5 applications were rejected.

In 2024-25 Q2, there were 1,368 approved DPPs under the DAS compared with the 1,235 approved in 2023-24 Q2, a increase of 10.8%. Chart 5 shows there has been upward trend in the number of approved DPPs since 2019-20 Q1.

DAS volumes continue to climb
Chart 5: Approved DPPs under DAS Apr-Jun 2015 to Jul-Sep 2024

Completed and Revoked DAS cases

A DPP reaches completion when the debt in the DPP has been paid in full, minus the fees paid to the DAS Administrator and the payments distributor. There were 548 DPPs under the DAS completed in 2024-25 Q2, an increase of 14.9% when compared with 2023-24 Q2.

The volume of DAS completions will depend on activity levels several years earlier with the average expected length of a DPP under DAS being around six years. We can expect a lower but steady volume of completions in line with current applications approved compared with previous completion levels.

A DPP is automatically revoked if either the debtor is made bankrupt, enters a trust deed which becomes protected, or other grounds. There were 427 DPPs under the DAS revoked in 2024-25 Q2, which is 33 (7.2%) fewer than the figure of 460 in the same quarter in 2023-24.

Amount repaid under the DAS

In 2024-25 Q2, around £15.3 million was repaid from debtors under the DAS compared with the £12.4 million million repaid in 2023-24 Q2. Since the DAS (Scotland) Amendment Regulations 2019 came into force on 4 November 2019, through DAS, creditors receive a minimum of 78% of the debt owed to them from debtors. This is after DAS Administrator and payments distributor fees. Prior to this, the minimum was set at 90%. After the DAS Administrator and payments distributor fees have been deducted around £12.3 million was paid to creditors in 2024-25 Q2.

Applications to vary and revoke a DPP

If a debtor’s circumstances change and they can no longer afford the agreed payments, or if they want to increase the level of payment, they can apply for a variation to their DAS DPP. Variations can also include a change to the length of the DPP or attaching a new condition.

The following type of variations are included in this publication:

• contribution change
• debt change
• discretionary condition
• essential credit
• frequency change
• partial settlement
• payment break

In the second quarter of 2024-25 a total of 2,870 were submitted to vary a DPP. Of these, 1,014 applications for a crisis payment break were approved, making up about 35.3% of all variation requests. Additionally, 1,821 standard variation applications were approved, representing 63.4% of all applications to vary a DPP. Only 1.2% of applications to vary a DPP were rejected. Approved variations accounted for 14.7% of live DAS cases.

Applications to revoke a DPP

A DPP is automatically revoked if the debtor is made bankrupt or enters a trust deed which becomes protected. There are also a number of grounds where the debtor, a money adviser acting on behalf of the debtor or a creditor in the DPP can apply to revoke a DPP, for example:

• debtors failed to satisfy a standard or discretionary condition
• debtors made a false statement in their application
• the debtors failed to make the agreed installment under the DPP and are currently in arrears of an amount equal to two installments
• the conditions for a joint DPP as specified in regulation 22(1) or 22(2) no longer apply

If the DPP is revoked, the debtor may be liable for all interest, fees, penalties and other charges that would have been payable had the DPP not been approved.

Of a total of 793applications to revoke a DPP, 427 were approved in 2024-25 Q2, 34 (7.4%) fewer than the figure approved in 2023-24 Q2, and 366 were rejected. Overall, 427 or 2.2% of live DAS cases were revoked during 2024-25 Q2.

Official Statistics label

These official statistics provide key information on personal and corporate insolvencies in Scotland. Official statistics are produced by professional independent statistical staff.

Section 6.1 of the 2007 Statistics and Registration Service Act defines official statistics as those produced by:

• the UK Statistics Authority
• government departments (including executive agencies)
• the Devolved Administrations in Scotland, Wales and Northern Ireland
• any other person acting on behalf of the Crown or
• any other organisation named on an Official Statistics Order

Under the Act, official statistics should:

• follow the Code of Practice for Statistics and
• fall within the scope of the Office for Statistics Regulation

The Office for Statistics Regulation assesses their compliance against the Code of Practice

Further information on the standards of official statistics in Scotland is available here - About our statistics - gov.scot.

Data Sources

The statistics for Scottish statutory debt solutions (bankruptcies, PTDs, and the DAS) use administrative data processed within AiB. These are stored on the systems BASYS, ASTRA and eDEN (formerly DASH) respectively. Note DASH was decommissioned on 30 June 2019 and its replacement system, eDEN, went live on 1 July 2019.

The exception to this is creditor and trustee petition bankruptcies. This is sourced from the courts that grant them and then stored on the BASYS system.

The statistics for statutory moratorium on diligence also use administrative data processed within AiB. This is stored on the Register of Insolvencies.

Corporate insolvencies calculated using administrative data records provided by the courts and insolvency professionals (liquidators and receivers). Corporate insolvency statistics published by AiB may differ from equivalent statistics published by The Insolvency Service. This is because the Insolvency Service use their own administrative data of records and Companies House to produce their statistics. There may be a time lag between the award/registration date and the date on which AiB receives notice of the insolvency.

Methodology

Figures are produced from tabulation of raw data from relevant administrative systems for the number of:

• bankruptcies
• PTDs
• DPPs under the DAS
• statutory moratorium on diligence and
• corporate insolvencies

The numbers of personal insolvencies reported are based on:

• the date of the court order
• agreement of the insolvency procedure or
• approval date

For creditor petitions, the published figures will be influenced by the late reporting of court orders. This may lead to underestimating the number of creditor petitions awarded. Creditor petitions statistics are subsequently adjusted after the final quarterly release of the financial year. The revised figures are reflected in the first quarterly report of the next financial year.

The number of DPPs under the DAS reported are based on the approval date of the DPP. The number of statutory moratorium on diligence reported are based on the submission date of the granted moratorium.

AiB must be notified of all company liquidations and receiverships in Scotland. AiB publishes quarterly official statistics based on its own administrative records.

Revisions

Revisions are usually made as a result of data being sent to AiB and logged on to the administrative systems after the cut-off date for data being extracted. These revisions tend to be small in the context of overall totals.

From 2024-25 Q2, scheduled revisions will occur every financial quarter. Providing users with data in a more timely manner. This will improve the accuracy of provisional estimates as more information becomes available.

On the first release of the quarterly statistics, all new quarterly data are given provisional status and labelled with [p]. These statistics will remain provisional until the data is finalised (i.e. no planned revisions). Any revisions that occur will be clearly marked with [r] and an explanatory footnote in the relevant table.

As is the current policy, revisions made for any other reason will be highlighted separately. Finalised figures will be published in the first quarter of the next financial year as the current policy states. Further details on the new revisions policy for scheduled revisions is shown in the table below.

Quality

The statistics produced by AiB are the most complete record of the number of statutory debt solutions and statutory moratorium on diligence. Statistics on corporate insolvencies are also included.

The statistics presented here do not include non-statutory debt solutions (where debtors make their own arrangements with creditors or enter informal debt management plans with a debt management firm).

These statistics are published on the fourth Wednesday of the month following the end of the quarter being reported on.

The exact publication date is pre-announced through a 12-month release calendar. This gives a specific release date at least four weeks in advance where possible – Official statistics: forthcoming publications - gov.scot

Statutory debt solutions statistics can be compared between different types of debt solutions. They can also be used to identify trends over time.

Changes in legislation and policy may affect the extent to which comparisons can be made over time for individual data series. Such changes might cause breaks in time series so that statistics from before and after the change are not comparable. Where this is known, they have been highlighted in the commentary and in the general background notes.

The Scottish Statutory Debt Solutions Statistics are the definitive source of statistics on statutory debt solutions in Scotland. The Insolvency Service include figures from our publications in their official statistics releases on individual insolvencies. Figures for the financial year 2024-25 will be finalised in Q1 of 2025-26

It is important to note that the operational, policy and legislative differences in all nations of UK. Users should be mindful of this caveat when making comparisons with other parts of the UK.

Correspondence and enquiries

For enquiries about this publication please contact:

AiB Statistics, Accountant in Bankruptcy
Email: aib_statistics@gov.scot

For general enquiries about Scottish Government statistics please contact:

Office of the Chief Statistician
Telephone: 0131 244 0442
Email: statistics.enquiries@gov.scot

How to access background or source data

The data collected for this statistical bulletin are available on the AiB Statistics webpages at https://www.aib.gov.uk/about-aib/statistics-data/quarterly-statistics.

Details of bankruptcies, PTDs, liquidations and receiverships can be found on the Register of Insolvencies, which is maintained by Accountant in Bankruptcy and can be accessed at: https://roi.aib.gov.uk/roi/.

The DAS register is an online public register which holds information about those who have a DPP under DAS, available at: https://eden.aib.gov.uk/dasregister.

Complaints and suggestions

If you are not satisfied with our service or have any comments or suggestions, please write to:
The Chief Statistician, 2W, St Andrews House, Edinburgh, EH1 3DG
Telephone: (0131) 244 0302
Email: statistics.enquiries@gov.scot

If you would like to be consulted about statistical collections or receive notification of publications, please register your interest at: https://blogs.gov.scot/statistics/

Details of forthcoming publications can be found at: Official statistics: forthcoming publications - gov.scot