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By Amy Jellings
Within the past couple of weeks the Accountant in Bankruptcy produced quarterly statistics for trust deeds, sequestrations, and the debt arrangement scheme.

In the current economic climate many people will be surprised that the number of sequestrations (bankruptcies in Scotland) has been in decline. There was a reduction of 8% compared to the same quarter in 2010.

The number of people going ahead with a protected trust deed increased compared to the same period in 2010 by a significant 22%. It's unclear why protected trust deed numbers have increased in contrast to sequestrations, not least because a trust deed (in contrast to sequestration) depends upon the existence of disposable income which in general is in decline for most families.

The Debt Arrangement Scheme has surged in popularity. Compared to the same quarter in 2010 usage has increased by more than 70%. This may reflect growing public awareness of the benefits of the scheme compared to the better known informal "debt management plan".
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By Hayden
Interesting figures Amy. Form what you have said it sounds as though the number of people who are insolvent overall has increased is that right?
Not by much Hayden.

Overall figures for insolvency in Scotland were up a fraction over the previous quarter and versus the same quarter in the previous year.

The headlines really are the rise of trust deeds and the debt arrangement scheme at a time when sequestration is being used less.

How do you explain that when disposable incomes are supposedly shrinking at the fastest rate in decades? The recent IVA and bankruptcy statistics follow a similar and perhaps unexpected trend.
As you say Amy it is strange that the official insolvency statistics are not showing a surge in debt problems even with increasing costs and depressed wages that families seem to be experiencing. Perhaps the low interest rates have something to do with it.....
And yet the proportion of persons (who are becoming insolvent) who have sufficient disposable income to fund a trust deed or IVA is on the increase apparently.

I am not especially surprised that the insolvency statistics overall aren't increasing quickly as banks are much less willing to lend than they were in previous times. It's just surprising that in times where disposable incomes are in decline the opposite seems to be true amongst those dealing with serious debt via the various insolvency options.