A drop off in the number of Scottish businesses and individuals that went bankrupt in the last quarter has triggered a swell in financial optimism and the first few rays of hope that the ill effects of the cold economic climate may be behind us. However, does this drop in the number of bankruptcies mean that the recession is easing? Is it a sign that there are fewer people facing severe debt problems or does it instead point to a greater awareness of the amount of debt help that is on offer to people in difficulty?

Well, in the third quarter of 2009 there were 5,767 personal insolvencies in Scotland. That was the figure released by the Scottish Government’s Accountant in Bankruptcy, which was down by 8 per cent on the previous quarter and down by 4 per cent on the same quarter of the previous year. 3,504 of these 5,767 personal insolvencies were sequestrations, the Scottish version of bankruptcy. That’s a drop of 6 per cent from the previous quarter. The other 2,263 were Protected Trust Deeds, which is 12 per cent down on the previous quarter. Essentially, the release of the current quarter’s figures will give us a much better understanding of the present trend but the initial outlook is encouraging.

A drop in the number of bankruptcies could be due to the fact that fewer of those people facing bankruptcies are applying to the Low Income, Low Asset scheme that was introduced in the spring of 2008. This is essentially a route into bankruptcy for those in need of debt help, whose debt level isn’t particularly high but cannot be serviced by their low income and low assets. Until this system was introduced, these people had very little access to assistance with their debt problem. A low income is basically a gross weekly income of no more than the minimum wage for a forty hour week, the equivalent to £229.20. Low assets means that you don’t have any asset worth over £1,000 and the total value of your assets is under £10,000. Therefore, you can’t own or share ownership of a house.

If you are facing financial problems and are in need of debt help, talk to a specialist debt advisor at Harrington Brooks, one of the longest established financial practices in the UK (0800 048 1764). They’ll be able to offer you a personal debt solution to suit your present financial circumstances. This will hopefully help you to avoid bankruptcy or sequestration unless it is absolutely necessary.