Personal bankruptcies forecast to hit 12,000 - Carrington Dean stars-five-icons

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Personal bankruptcies forecast to hit 12,000

Families in Scotland will continue to be blighted by problem debt this year with 12,000 individuals forecast to enter bankruptcy in 2015, according to a report by business advisers BDO.

The number of people entering bankruptcy this year is lower than the peak for personal bankruptcies in Scotland which occurred in 2009 when the UK economy was mired in the worst recession on record.

However, even with the UK economy back on a growth track, thousands of families are still struggling with debts they cannot afford to repay.

There are a range of statutory debt solutions available for people in financial distress which offer an alternative to bankruptcy and which offer individuals protection from action being taken against them by creditors and will freeze interest and charges on their debts.

The Scottish Government has invested in marketing these debt solutions through a number of websites in recent years including Help Out of the Hole and now Scotland’s Financial Health Service.

Sequestration (the Scottish form of Bankruptcy) and Low Income Low Asset Bankruptcy can be the best option for those in debt. However, by seeking advice earlier other options such as Protected Trust Deeds and the Debt Arrangement Scheme are often available, whereby the debtor will be able to retain assets such as their home and car, whose protection is not guaranteed with bankruptcy.