Released: 26 April 2023
Next update: 26 July 2023

Official Statistics Label: Official Statistics

Authors: Catherine McAuley and Lucy Horner

Contact details:

Data used in this release: Scottish Statutory Debt Solutions Statistics: 2022-23 Quarter 4

New data additions: Average debt and contribution figures for each debt solution are now included in the associated Excel file.

Provisional figures: All figures for April 2022 onwards remain provisional until final validation in July 2023.

Media enquiries: AiB Communications team ()

Twitter: AiB_updates; ScotStat

We want your feedback: All feedback on these statistics is welcome. This can be done either by completing a short online feedback form or by email.

 

Main points for January to March 2023

There were 1,912 personal insolvencies (bankruptcies and protected trust deeds (PTDs)) in 2022-23 Q4. This is an increase of 0.8% when compared with 2021-22 Q4.

In 2022-23 Q4, 470 debtor applications for bankruptcy benefitted from the revised fee structure. Of these, 403 cases (85.7%) paid no fee at all.

Under the Debt Arrangement Scheme (DAS), there were 1,205 Debt Payment Programmes (DPPs) approved in 2022-23 Q4. This is compared with 1,040 for the same quarter from 2021-22, an increase of 15.9%.

Chart 1 below shows that since April to June 2009, the number of personal insolvencies remain larger than the number of DPPs under the DAS.

 

Chart 1 shows the total number of personal insolvencies awarded and Debt Arrangement Scheme (DAS) Debt Payment Programmes (DPPs) approved between 2009-10 Q1 and 2022-23 Q4. This chart shows that personal insolvencies remain larger than DPPs under the DAS.

 

There were 882 applications for moratoria granted in 2022-23 Q4, an increase of 21.5% when compared to the same quarter in 2021-22.

Corporate insolvencies increased from 240 in 2021-22 Q4 to 346 in 2022-23 Q4.

Further comparisons on the main Scottish Statutory Debt Solutions can be found in Table 1 below.

 

Table 1. Summary of the latest Scottish Statutory Debt Solutions Statistics [p]
Financial quarter 2021-22 Q1 2021-22 Q2 2021-22 Q3 2021-22 Q4 2022-23 Q1 2022-23 Q2 2022-23 Q3 2022-23 Q4 Q4 vs Q4 change
Bankruptcies 586 527 638 554 591 595 584 590 6.5%
Protected trust deeds 1,298 1,394 1,429 1,343 1,451 1,480 1,391 1,322 -1.6%
Total personal insolvencies 1,884 1,921 2,067 1,897 2,042 2,075 1,975 1,912 0.8%
Approved DPP under DAS 1,209 1,138 1,102 1,040 1,182 1,251 1,309 1,205 15.9%
Amount repaid under DAS (£ million) 10.8 10.7 11.0 11.3 11.3 12.3 11.6 11.5 2.3%
Moratoria on diligence granted 753 947 739 726 722 879 785 882 21.5%
Total corporate insolvencies 163 211 240 240 244 270 272 346 44.2%
Source: Accountant in Bankruptcy

Note

[p] Provisional. Figures for the financial year 2022-23 remain provisional until validation in July 2023.

[x] Data not (yet) available.

 

Chart 2 shows the quarterly trend of personal insolvencies for last two financial years. It shows both quarterly and cumulative personal insolvencies. Comparisons can be made between the two financial years.

 

Chart 2 shows the quarterly and cumulative personal insolvences for 2021-22 and 2022-23. This chart shows that levels of personal insolvencies in 2022-23 were slightly higher than in 2021-22.

 

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About this release

This quarterly release contains the latest Scottish statistics on:

  • statutory debt solutions;
  • statutory moratoriums on diligence;
  • corporate insolvencies.

These are compiled by Accountant in Bankruptcy (AiB), an executive agency of the Scottish Government.

The majority of the statistics presented use data from AiB administrative records. Estimates for 2022-23 are provisional until the publication of final figures in July 2023.

Non-statutory debt solutions are where debtors make their own arrangements with creditors or enter informal debt management plans with a debt management firm. These are not included in these statistics.

The data used in this release is not seasonally adjusted. It is recommended you use year-on-year comparisons (for example 2022-23 Q4 compared with 2021-22 Q4).

 

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. Awards of bankruptcy can be grouped into three types:

  • Debtor application;
  • Creditor petition;
  • Trust deed petition.

Further information on bankruptcy can be found in the Guide to Bankruptcy section.

There were 590 bankruptcies awarded in 2022-23 Q4, an increase of 6.5% when compared with 2021-22 Q4.

Of the 590 awards of bankruptcy, 79.7% came from debtor applications. The remaining bankruptcies came from creditor petitions (20.3%). There were no trust deed petitions in 2022-23 Q4.

Creditor petitions increased from 54 in 2021-22 Q4 to 120 in 2022-23 Q4. Note petitions are approved by courts with AiB only recording when a petition has been awarded. So, the number of creditor petitions recorded could be influenced by the late reporting of creditor petitions court orders. Under the current revisions policy, quarterly creditor petitions figures are revised quarterly to account for late reporting or missing cases.

 

Emergency and permanent measures

The emergency Coronavirus Acts introduced to aid in the response to the COVID-19 pandemic as well further legislation such as:

  • The Coronavirus (Recovery and Reform) (Scotland) Act
  • The Bankruptcy (Miscellaneous Amendments) (Scotland) Regulations 2021
  • The Bankruptcy and Debt Arrangement Scheme (Miscellaneous Amendment) Regulations 2023

included temporary and permanent measures which impact on statutory debt solutions legislation in Scotland.

Some of the changes include:

  • improved access to Minimal Asset Process (MAP) bankruptcy by removing the lower debt threshold completely and increasing the upper threshold to £25,000;
  • removal of student loan debt contributing to MAP eligibility;
  • removal of debtor application fees for those assessed as having no surplus income or being in receipt of prescribed benefits;
  • increasing the deposit paid by creditors from £300 to £750 where AiB is trustee in a creditor petition bankruptcy;
  • the electronic delivery of documents;
  • remote meetings of creditors in bankruptcy proceedings;
  • the amendment to the debt level for creditor petitions from £3,000 to £5,000.

Further information is detailed in the Legislation section.

 

Debtor applications

Debtor applications for bankruptcy decreased by 6.0% from 500 in 2021-22 Q4 to 470 in 2022-23 Q4. There are two types of debtor applications for bankruptcy: MAP or Full Administration. Full Administration bankruptcies increased by 8.3% from 133 to 144. MAP bankruptcies decreased by 11.2% from 367 to 326. The majority of bankruptcies awarded through debtor applications are MAP cases.

Chart 3 shows the recent trend in bankruptcies awarded through debtor applications since April to June 2009. The total awards of debtor applications in 2021-22 decreased by 16.4% when compared with 2015-16. This 2021-22 is remains below levels between 2009-10 and 2019-20.

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 2022-23 Q4, 511 debtor applications for bankruptcy were received by AiB compared with 549 received in 2021-22 Q4.

 

Chart 3 shows the number of debtor applications awarded between 2009-10 Q1 and 2022-23 Q4 by type of bankruptcy. This chart shows that in 2022-23 Q4, around 70% of debtor applications awarded were Minimal Asset Process (MAP) bankruptcies.

 

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 fourth quarter of 2022-23, The Accountant was appointed trustee in 535 cases awarded. This is 90.7% of bankruptcies for the quarter. This is particularly due to the fact that around 69.4% 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 reduced from £90 to £50. Some changes were only introduced on 6 February 2023. See the Legislation section for more detailed information on the changes.

In the fourth quarter of 2022-23, a total of 470 bankruptcy awards were made following applications submitted to AiB under the revised fee structure. Of this total, 403 (85.7%) applicants were not required to pay any fee at all. By type of debtor applications, around 92.9% of MAP cases and 69.4% of Full Administration bankruptcies paid no fee in 2022-23 Q4.

 

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 2022-23 Q4, there were 559 debtors discharged and 666 trustees discharged, a decrease of 4.4% and 15.1% respectively when compared with 2021-22 Q4.

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 2021-22 and 2022-23, there were 41 and 48 bankruptcy recalls respectively.

 

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Protected Trust Deeds

A PTD is a formal debt solution where an agreement is made between a debtor and creditors to repay part or all of their debt.

The debtor conveys their estate to an insolvency practitioner (the trustee) to administer for the benefit of creditors. The arrangement normally includes a contribution from income for a set period.

Provided the debtor complies with the terms of their deed, the creditors can take no further action to pursue the debt or to make the debtor bankrupt. This is similar to Individual Voluntary Agreements in England and Wales, although there are important differences in the way they are set up and administered.

PTDs registered

There were 1,322 PTDs registered in 2022-23 Q4, a decrease of 1.6% when the same quarter in 2021-22. Chart 4 shows that the number of PTDs have followed a similar trend to bankruptcies and had been generally increasing between 2014-15 Q4 and 2019-20 Q1, before gradually declining in 2019-20 Q2.

 

Chart 4 shows the total number of personal insolvencies awarded by type of debt solution between 2015-16 Q1 and 2022-23 Q4. This chart shows that despite a drop in volumes since the COVID-19 pandemic, there are still more Protected Trust Deeds (PTDs) than bankruptcies.

 

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 2022-23 Q4, 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 2022-23 Q4, 92.7% 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 1,621 debtors discharged in the fourth quarter of 2022-23, a 107.0% increase when compared with the same quarter in the previous year. There were 1,500 trustees discharged in 2022-23 Q4, a 21.4% increase when compared with 2021-22 Q4.

 

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Debt Arrangement Scheme

The Debt Arrangement Scheme (DAS) is a statutory debt management solution administered by AiB. Under the DAS, a debtor commits to a Debt Payment Programme (DPP) which allows them to repay their debts based on their disposable income while they are protected from creditors taking any action against them to recover their debt. If the DPP is approved, all interest, fees and charges on the debt will be frozen and waived if the programme is completed in full.

 

Approved DAS applications

In 2022-23 Q4, there were 1,205 approved DPPs under the DAS compared with the 1,040 approved in 2021-22 Q4, an increase of 15.9%. Chart 5 shows there has been upward trend in the number of approved DPPs since 2019-20 Q4.

 

Chart 5 shows the number of Debt Arrangment Scheme (DAS) Debt Payment Programmes (DPPs) approved between 2015-16 Q1 and 2022-23 Q4. This chart shows that levels of approved DPPs remain higher than prior to the pandemic despite after slight fall in 2021-22 Q1.

 

The number of approved DPPs under the DAS increased year-on-year between 2006-07 and 2012-13. This is likely due to changes in legislation and improvements to the DAS Administrator’s IT system. More information on legislative changes is included in the background section.

The sharp decrease in the DAS approvals in 2015-16 (from 4,156 to 2,043) was likely due a number of reasons including legislative changes and the availability of DAS from insolvency practitioners. The attractiveness of the DAS relative to other statutory debt solutions could have also been affected by changes to regulatory procedures, operated by the Financial Conduct Authority, in relation to money advisers and insolvency practitioners.

Note that not all applications received by AiB are approved. In the fourth quarter of 2022-23, 1,311 applications for a DAS DPP were received by AiB. In the same quarter, 9 applications were rejected.

 

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 450 DPPs under the DAS completed in 2022-23 Q4, a 2.4% decrease when compared with 2021-22 Q4.

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 451 DPPs under the DAS revoked in 2022-23 Q4, which is 8 fewer (1.7%) than the figure of 459 in the same quarter in 2021-22.

 

Amount repaid under the DAS

In 2022-23 Q4, around £11.5 million was repaid from debtors under the DAS compared with the £11.3 million repaid in 2021-22 Q4. 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 £9.6 million was paid to creditors in 2022-23 Q4.

 

Applications to vary 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.

The Debt Arrangement Scheme (Scotland) Amendment Regulations 2019 came into force on 04 November 2019. These Regulations introduced improvements to the DAS to increase the accessibility and sustainability of DPPs and offer greater flexibility. These included short term financial crisis payment break. Money advisers can automatically process a variation to excuse a missed payment if their client has suffered a short term crisis and cannot make their payment. As there is no need for the full variation application, it is an instantaneous process. Money advisers have discretion as to the “crisis” definition and must annotate the application with the reason for approving the variation. Client may have up to 2 months’ worth of crisis break variation approved in any rolling year.

In 2022-23 Q4, a total of 2,189 applications were made to vary a DPP. Of these, 850 for crisis payment break were approved under the new regulations, accounting for around 38.8% of the total number of applications to vary a DPP. There were 1,306 approved standard applications to vary a DPP which accounts for 59.7% of the total number, while 1.5% accounts for the number of rejected applications. The number of approved variations was 12.9% 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 instalment under the DPP and are currently in arrears of an amount equal to two instalments
  • 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 672 applications to revoke a DPP, 446 were approved in 2022-23 Q4, 13 (2.8%) fewer than the figure approved in 2021-22 Q4, and 226 were rejected. Overall, 451 or 2.7% of live DAS cases were revoked during 2022-23 Q4.

 

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Statutory Moratorium on Diligence

A moratorium provides protection from creditor debt enforcement. This protection is available to individuals as well as the following entities:

  • a trust in respect of debts incurred by it
  • a partnership (including a dissolved partnership)
  • a corporate body
  • an unincorporated body
  • a limited partnership (including a dissolved limited partnership) within the meaning of the Limited Partnerships Act 1907.

Individuals can request a moratorium if they need a period of breathing space. This allows them time to consider whether to apply for a statutory debt solution.

The Coronavirus (Scotland) Act 2020 extended the duration of the moratorium from six weeks to six months. The rule prohibiting more than one moratorium in any 12-month period was also temporarily set aside. This was reinforced on 01 October 2021. Now, moratorium protection cannot be provided where an application has been made in the previous 12 months.

The Coronavirus (Recovery and Reform) (Scotland) Act fixes the period of protection at 6 months. This continues the enhanced protection introduced temporarily by the Coronavirus (Scotland) Act 2020. This commenced on 01 October 2022.

There were 882 (debtor and entity) applications for moratoria granted in 2022-23 Q4. This is an increase of 21.5% when compared with the same quarter in 2021-22.

 

Chart 6 shows the number of statutory moratorium on diligence granted between 2015-16 Q1 and 2022-23 Q4. This chart shows that depite a recent fall, the levels of moratoriums on diligence remain higher than pre-pandemic levels.

 

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Corporate insolvency

AiB handles devolved elements of corporate insolvency. The Scottish Government’s competence is limited to:

  • the process of company liquidation and receivership and;
  • the management and maintenance of the Register of Insolvencies (RoI).

The RoI contains details of liquidation and receivership of Scottish businesses. This includes those wound up by either a Sheriff Court or the Court of Session. AiB needs to be notified of all company liquidations and receiverships in Scotland.

The statistics below are based on the date the insolvency was registered on AiB’s system. So, there is a time lag between the dates of award/registration and when AiB receives notice. Therefore, the figures reported by AiB may not exactly reflect the true number of awards/registrations in a quarter.

Table 2 shows corporate insolvencies by type between 2021-22 Q1 and 2022-23 Q4. Corporate insolvencies include:

  • receiverships appointments,
  • compulsory liquidations,
  • creditors’ voluntary liquidations.

In the past, the majority of corporate insolvencies used to be compulsory liquidation. Since 2020-21 Q1, the majority are creditors’ voluntary liquidations. Creditors’ voluntary liquidations increased by 8.0% between 2021-22 Q4 and 2022-23 Q4. Compulsory liquidations increased from 40 to 130 over the same period.

 

Table 2. Summary of the latest corporate insolvencies and members’ voluntary liquidations [p]
Financial quarter 2021-22 Q1 2021-22 Q2 2021-22 Q3 2021-22 Q4 2022-23 Q1 2022-23 Q2 2022-23 Q3 2022-23 Q4 Q4 vs Q4 change
Receiverships 0 0 0 0 0 0 0 0 [z]
Compulsory liquidations 32 32 50 40 45 78 87 130 225.0%
Creditors’ voluntary liquidations 131 179 190 200 199 192 185 216 8.0%
Total corporate insolvencies 163 211 240 240 244 270 272 346 44.2%
Members’ voluntary liquidations 170 181 162 204 151 120 161 200 -2.0%
Source: Accountant in Bankruptcy

Note

[p] Provisional. Figures for the financial year 2022-23 remain provisional until validation in July 2023.

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

[x] Data not (yet) available.

 

Chart 7 shows that there were 346 corporate insolvencies in 2022-23 Q4 compared with 240 in 2021-22 Q4. This is an increase of 44.2%.

Chart 7 also shows the number of MVLs. Some of the reasons why member(s) of a company may decide to adopt a voluntary winding up resolution and appoint a liquidator include:

  • retirement of company member(s),
  • restructuring of a company,
  • deregistering an inactive company or,
  • changes in the profitability of a market.

The liquidator is appointed to realise the assets of the business and distribute the proceeds among the company members. It should be noted that MVLs are for solvent companies only, but still classed as insolvency process.

There were 200 MVLs in 2022-23 Q4 compared with 204 in 2021-22 Q4, a decrease of 2.0%.

 

Chart 7 shows the total number of corporate insolvencies and members' voluntary liquidations between 2010-11 Q1 and 2022-23 Q4. This chart shows that current levels of corporate insolvencies are higher than pre-COVID levels.

 

Reserved elements remain the responsibility of the UK Government and are dealt with by The Insolvency Service. The Insolvency Service is an executive agency sponsored by the Department for Business, Energy & Industrial Strategy.

Reserved elements include:

  • company voluntary arrangements,
  • administration,
  • legal effects of liquidation and,
  • regulation of insolvency practitioners.

Statistics on these reserved elements are available from The Insolvency Service.

The statistics presented here differ from those by The Insolvency Service, as they source their data from Companies House. Differences are due to AiB using its own administrative system’s data rather than the start date of the insolvency. Corporate insolvency statistics produced by The Insolvency Service are available here.

 

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Background information

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 use administrative data records provided by the courts and insolvency professionals (liquidators and receivers). Corporate insolvency statistics published by AiB may differ from equivalent statistics from The Insolvency Service. This is because they source their data from their own administrative data of records and Companies House. There is a time lag between the dates of award/registration and when AiB receives notice. Differences between sets of these statistics are mainly due to AiB using its own administrative system’s data.

 

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. Corporate insolvencies are based on the date the insolvency was registered in AiB’s system.

 

Annual Scottish Statutory Debt Solution Statistics

Historically, the AiB Annual Report and Accounts included a summary statistics on statutory debt solutions, including:

  • Division of funds by bankruptcy
  • Count and rate per 10,000 adults by local authority areas
  • The outcome of DPPs under the DAS approved since 2005-06.

The statistics annex in the annual corporate report has been replaced with the experimental Statutory Debt Solution annual statistics publication. This was published for the second time on 27 July 2022. This publication includes the finalised figures for the financial year 2021-22. The next edition of the annual statistics publication is scheduled for release in August 2023.

 

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 2022-23 Q1, 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.

 

Revision Schedule.
Publication edition Scheduled revisions
April to June (Q1) First release of April to June data. Data from previous April until following March is finalised.
July to September (Q2) First release of July to September data. Revise period April to June (Q1).
October to December (Q3) First release of October to December data. Revise period April to September (Q1-Q2).
January to March (Q4) First release of January to March data. Revise period April to December (Q1-Q3).

 

General Revisions and Corrections

In general, all figures for the previous financial years reported in this publication should be final and should not be revised in future. This is in line with the current revision policy. Sometimes, when quality assuring the data for the latest years, errors in term of data classifications applied may come to light. In this case, we may correct the erroneous data classifications in previous year. We will alert users of our statistics about such corrections.

 

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Quality

Relevance

Relevance is the degree to which statistics meet the current and potential needs of user.

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. This is where debtors make their own arrangements with creditors or enter informal debt management plans with a debt management firm. The demand for statutory debt solutions should be seen within the context of the wider debt solution market.

This demand will be affected by changes in the legislative and regulative environment. For example, changes to regulatory procedures operated by the Financial Conduct Authority. This could affect the supply of non-statutory solutions and in turn the demand for statutory debt solutions.

Key users of AiB’s insolvency statistics are:

  • AiB;
  • the insolvency profession;
  • debt advice agencies;
  • media organisations;
  • academics;
  • creditors and
  • the general public.

In early 2020, AiB launched an online survey asking users for feedback on this official statistics publication series. This remains available and AiB will address user feedback to investigate how well the current set of statistics meet user needs.

 

Accuracy

Accuracy is the closeness between an estimated result and the (unknown) true value.

All formal insolvency procedures entered into by a company, a partnership or an individual are required by law to be reported to the appropriate body. So the statistics should be a complete record of statutory insolvency in Scotland.

The number of statutory debt solutions and statutory moratorium on diligence are based on:

  • the date of the order, agreement of the insolvency procedure or
  • the approval date.

This is not on the date it was registered on the administrative recording system. This does not have any implication for cases processed within AiB. The published number of creditor petitions may be influenced by the late reporting of creditor petitions court orders. This may lead to missing data. Under the current revision policy, figures on creditor petitions are revised quarterly to account for late reporting or missing cases.

The number of corporate insolvencies are based on the date the insolvency was registered on the AiB system (BASYS). The corporate insolvency figures may be influenced by the late reporting of orders. This may lead to a quarter’s figures containing cases awarded in the previous quarter. This should be noted when making comparisons of trends over time or comparing with other sources of data. This includes those published by The Insolvency Service, and Companies House.

Data validation processes are in place to:

  • identify and resolve erroneous data inputs and duplication of cases or;
  • when extracting data from the administrative systems, to make sure that returns cover all debt solutions and;
  • to check the accuracy and consistency within tables and between related tables.

 

Timeliness and punctuality

Timeliness refers to the time gap between the publication date and the reference period for the statistics.

Punctuality is the time lag between the actual and planned dates of publication for the statistics.

These statistics are published on the fourth Wednesday of the month following the end of the quarter being reported on. This publication date allows for:

  • receipt of all the data inputs;
  • time for quality assurance of the data extracts;
  • time for tabulating records and;
  • time to compile the statistical release.

This means there is an approximate one month lag between the end of the financial quarter and the publication of the statistics.

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 practicable – Official statistics: forthcoming publications - gov.scot

 

Accessibility and clarity

Accessibility is the ease with which users can access the statistics and data. This includes the format in which data is available and availability of supporting information.

Clarity is the quality and sufficiency of the commentary, illustrations, accompanying advice and technical details.

The Scottish Statutory Debt Solutions Statistics are available free of charge to users on the AiB website. They are published as HTML and a Word document via the AiB website and ScotStat. The accompanying tables are also published in the Excel format. We aim to make our publications and accompanying tables as accessible as possible. If there are users who wish to receive our publication in a specific format please contact us. Contact details are at the beginning of our publication report for any requests.

It is important to ensure that statistics are presented in a clear, unambiguous way. This is to support and promote use by all types of users. To this end, we have adopted the use of plain language as much as possible. The main findings are presented using a series of text and charts. Technical terms, acronyms and definitions are defined and explained when this is appropriate. These approaches would ensure that the statistics can be used effectively.

AiB does want readers and users’ feedback on any aspect of these statistics. Users are encouraged to complete our online survey or get in touch with us. Contact details and link to the online survey are at the beginning of our publication report.

 

Comparability

Comparability is the degree to which statistics can be compared over time, region or another domain.

Statutory debt solutions statistics can be compared between different types of debt solutions. They can 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 change 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.

 

Coherence

Coherence is the degree to which the statistical processes that generate two or more outputs use the same concepts and harmonised methods.

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.

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.

AiB publishes year end totals of the quarterly statistics in its annual statistics publication series. These numbers may differ slightly to those reported throughout the year. The annual statistics are subsequently revised to match. In these annual statistics publications, statistics by local authority areas are included. This is achieved by matching the postcode with the Standard Geography Code Register: statistics.gov.scot: Standard Geography Code Register.. By adopting the standard geography code, this ensures geographical harmonisation and coherence. Thus, the data is consistent over time between local authority areas within Scotland. Note, when producing statistics by local authority areas, numbers may differ slightly. This is because postcodes of debtors cannot always be assigned. Where this occurs these differences will be highlighted.

AiB is required to be notified of all company liquidations and receiverships in Scotland. AiB publishes quarterly official statistics based on its own administrative records. These differ from the Insolvency Service’s Insolvency Statistics publications. The Insolvency Service use data from Companies House as their source. Differences are due to AiB using its own administrative system’s data rather than the start date of the insolvency.

 

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Glossary of key terms

Debtor
Any person who owes money to another.
Creditor
Any person, business or organisation that is owed money by another.
Bankruptcy
(Also known as sequestration in Scotland) is a legal declaration that someone cannot pay their debts. If a person is declared bankrupt, control of things that they own is passed to a trustee who may sell them to pay money owed to creditors. A regular payment from a person’s income may also have to be made.
Protected Trust Deed (PTD)
A form of insolvency that transfers a debtor’s estate to a trustee to be realised for the benefit of creditors.
Debt Arrangement Scheme (DAS)
A Scottish Government debt management tool. Allows a debtor to repay their debts through a Debt Payment Programme. This gives more time for repayments, free from the threat of enforcement (diligence) or bankruptcy.
Moratorium on diligence
A protection from creditor debt enforcement. This protection is available to individuals as well as certain entities.
Insolvency Practitioner
A person (usually, but not necessarily, a chartered accountant) licensed and authorised to act as a trustee in sequestrations or trust deeds.
Trustee
A person who administers a bankruptcy or trust deed. In sequestrations, a trustee can be either the AiB or a private insolvency practitioner. In trust deeds, trustees must be an insolvency practitioner.
Receivership appointments
A receiver is appointed by a lender holding a charge over some or all of the company’s assets. The main responsibilities of a receiver are to ensure the appointing lender is paid.
Compulsory liquidation
Or winding up by the court is a procedure by which the assets of a company are sold, and the net free proceeds are distributed to the company’s creditors. A court order is required to put a company into compulsory liquidation.
Creditors’ voluntary liquidation
A director can propose a creditors’ voluntary liquidation if the company can’t pay its debts (it’s ‘insolvent’) or enough shareholders agree. This means the company will stop trading and be liquidated (‘wound up’). The assets of the company are sold and the net free proceeds are distributed to the company’s creditors.
Members’ voluntary liquidation
The shareholders of a solvent company pass a voluntary winding up resolution and appoint a liquidator. The liquidator will realise the assets of the business in order to distribute the proceeds to company members. A company is considered legally solvent when it is able to meet its financial obligations and the value of its assets. The company must be in a position to pay its debts in full.

 

An Official Statistics publication for Scotland

The figures released today were produced in accordance with professional standards set out in the Code of Practice for Official Statistics; they undergo regular quality assurance reviews to ensure that they meet customer needs.

Correspondence and enquiries

For enquiries about this publication please contact:

AiB Statistics, Accountant in Bankruptcy
Email:

For general enquiries about Scottish Government statistics please contact:

Office of the Chief Statistician
Telephone: 0131 244 0442
Email:

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:

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