Prediction that 400 Scots could go bankrupt every week in 2012

Accountancy Firm PKF has predicted that over 400 Scottish residents will go bankrupt every week in 2012 due to the continuing poor economics.

Sequestration (the Scottish term for bankruptcy) the firm predict that over 20,000 Scots will have entered this or a Protected Trust Deed (PTD) by the end of 2011 and that figure will continue to rise throughout 2012.

PKF predict a rise due to further cuts on the household budget; public sector cut backs, hours being cut and wages being frozen and no sign of an upturn in the economy.

The firm also warned that any increase in the base rate of interest would cause an alarming increase in the amount of homeowners going bankrupt.
A spokesperson for PKF said: “The dramatic rise in the number of more affluent Scots being made bankrupt is a further sign that the after effects of the recession are spreading among all sectors of society with the result that I believe all personal insolvencies will continue to rise and remain at high levels for several years to come.”

He also said since LILA came out in 2008 Scottish bankruptcies have steadily increased as many struggling Scots have taken advantage of this cheap way into bankruptcies when they have low assets and low income.

However recently these numbers have fallen and there is an increase in people entering a Protected Trust Deed .This they predict would peak in 2012 as job losses, overtime bans, no increase in wages and personnel circumstances all take their toll on the middle class in Scotland.

“People entering a Protected Trust Deed are more affluent as they have a disposable income and are able to pay something towards their debt“.

“Before the recession if these people were struggling with their debt they would release equity on the ever increasing property they owned , However nowadays property prices are stagnant and banks have a great reluctance to lend at such a volatile time“. This leaves many with little option.