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Scottish seaside towns suffer highest personal insolvencies

Scottish seaside towns suffer highest personal insolvencies

People living in towns near the sea and in Scotland suffer from the highest level of personal insolvencies, according to a new report by Experian. The information services company has said that only one out of the 10 towns with the highest insolvency levels in the latest Insolvency Service figures was inland – Motherwell, near Glasgow.

The analysis also found that eight out of the top 10 insolvency hotspots were in Scotland, with Kirkcaldy, Falkirk and Clydebank counting the highest bankruptcy level with 20 in every 10,000 households declared insolvent between July and September this year.

Some key seaside resorts in England also recorded increasing insolvency levels in the third quarter. Hartlepool, Weston-super-Mare and Scarborough saw personal insolvencies rise by 98 per cent, 43 per cent and 20 per cent respectively.

The highest increase in insolvencies was among people part of the ‘claimant cultures’ group – families reliant on benefits living in low-rise council housing – which account for 8.99 per cent of all insolvencies across the UK.

However, the Insolvency Service today revealed a 7.2 per cent fall in personal insolvencies in the three months to September compared to the same period last year. However, the figures show a 2.5 per cent increase on the previous quarter, bringing the total individual insolvencies across England and Wales to 28,062. Bankruptcies are a fifth lower than they were a year ago, with 7,617 orders made.

‘Our analysis shows that most of the areas identified in the top ten have also seen higher than average rates of business insolvencies, which may have impacted unemployment levels and pushed them to the top of the league table for personal insolvencies.’ Said Jonathan Westley, managing director of Consumer Information Services at Experian UK & Ireland.

The Insolvency Service said that one of the reasons for the decline is the increasing use of debt relief orders (DROs), which were introduced three years ago and have overtaken bankruptcies for the first time in today’s figures.

DROs are often dubbed ‘bankruptcy light’ and are aimed at people who have more modest levels of debt but no realistic prospect of paying it off.

There were 7,777 DROs in the third quarter of this year, showing a slight decline on the previous quarter but a 2.3 per cent rise on a year ago. IVAs – a type of agreement between people and their creditors – were the only type of personal insolvency to show an increase on the previous quarter, with a large 11.9 per cent rise to reach 12,668.

About The Author

Mark Hodgson is the Managing Director of Tremark Associates, one of the UK’s leading providers of investigative services. Mark has 30 years experience in private Investigations and the commercial debt recovery industries. He is Vice President of the Association of British Investigators, a member of the World Association of Detectives, The Institute of Credit Management and an associate member of R3 -The Association of Business Recovery Profession.