Commenting on the Scottish Insolvency Statistics, Q3 2015-16, Tim Cooper, Chair of R3 in Scotland, the insolvency trade body says:
“The number of personal insolvencies in Scotland has been falling over the last number of years. Although they have risen slightly this quarter, they are still well below the level for this time last year.
“In this period of low inflation, consumers may find it easier to keep costs down and make their money stretch further. The sustained low interest rates may also be easing some of the pressure on personal finances. However, recent job losses in the oil and gas sector could have pushed some into insolvency.
“Still, our latest research shows that one-in-five Scots expect their personal financial situation to improve over the next six months. It’s good to see optimism.”.
“It’s also worth noting that these figures don’t take into account the thousands of people in non-statutory debt management plans across the country. Consumer debt is a growing problem but without official records of those in schemes we don’t know the true extent of the problem.”
“There has been a substantial increase in the number of corporate insolvencies this quarter, which goes against the downward trend we’ve seen in recent years.
“Over the course of this year, we are likely to experience further stress in the oil and gas sectors, and that having a wider impact across Scotland. Many sectors may already be feeling the effects, including the supply, leisure and hospitality industries.
“We could see the numbers rise further when an interest rate rise comes, and thousands of ‘zombie’ businesses are no longer able to keep their heads above water when it comes to meeting their repayments. Businesses need to plan ahead so that when a rise does eventually come they are financially prepared.
“For those already in significant financial difficulty, it’s important to remember that entering an insolvency procedure doesn’t have to equate to permanent financial failure. The insolvency profession rescues two-in-five insolvent businesses. Seeking professional advice early is the first step in the road to recovery.”