Official figures show the number of Scottish businesses and individuals falling into insolvency fell significantly at the end of 2012. However, experts in the industry believe it is not just a question of better financial management.
The final three months of last year saw 185 failing companies – down by a third on the same period for 2011. Personal insolvencies were at 3,800 in the same period, a fall of five per cent in respect of like for like comparison.
However, the figures are still high in relation to previous years, according to professionals in the insolvency field. Whilst the news is wholly positive, and indicates better financial management, many commentators believe this is not the only reason.
Commenting on personal insolvencies, debt solutions specialist Peter Dean claimed that higher personal insolvency fees were more of reason for the fall. Mr Dean said:
“What that means is people who haven’t got any money were paying a £100 to gain bankruptcy protection from their creditors, that has increased to £200 and I think that has had an effect on the figures.”
For businesses though, there is a definite sea change in the strategy of commercial finance in Scotland.
Many firms are opting for alternative finance solutions, for example; working with an asset finance broker to find more flexible options which do not increase debt levels.
A top accountant has warned that one section of society is seeing an increase in insolvency levels.
Bryan Jackson from PKF said that many more affluent Scots are losing control of their finances, despite still being in work and owning property.