"Financial Armageddon" Predicted for 400 Scots a Week, Says Accountancy Firm PFK

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Trustdeeds.net reports that around 400 Scottish citizens a week could be facing ‘Financial Armageddon in 2013 as stated by accountancy firm PFK.

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The Scottish Government and its agencies continue to look at ways to help individuals struggling to break the cycle of debt.

According to accountancy firm PFK, Scotland has double the rate of personal insolvencies compared to the rest of the UK, with some 20,000 individuals becoming insolvent every year, and this is set to continue for around another 4-5 years.

Bryan Jackson, the firm's corporate recovery partner, said: "With no improvement in the economy, employment insecurity rife and rising living costs, there is little sign of this level of personal insolvency reducing over the next three to four years. This means that another eighty to one hundred thousand Scots will go bust in the next four to five years.

"Personal insolvencies appear to be steady at around 20,000 per year. While this number is lower than the peak achieved in 2009, when 23,541 Scots were made bankrupt, it is by any standards a very high figure indeed.”

Mr Jackson believes true economic recovery is some distance away and the consistently high rates will not be coming down any time soon. Scotland depends on the public sector more than the private to create employment, which is the current climate is static if not declining.

In response to PKF’s estimated figures, a Scottish Government spokesman said: "It is difficult to compare personal insolvency figures from 2004 with the present day due to the introduction of new routes to bankruptcy for those most in need of debt relief, such as the Low Income Low Asset route introduced in 2008.

"The Scottish Government and its agencies continue to look at ways to help individuals struggling to break the cycle of debt. Through its work on bankruptcy law reform, Accountant in Bankruptcy is in the process of determining how debt management and debt relief mechanisms can be further modernised to ensure that relevant and proportionate options are available.

"The Scottish Government's debt management tool, the Debt Arrangement Scheme, continues to be a viable option for Scots struggling with debt. The Debt Arrangement Scheme freezes interest and helps people struggling with debt pay back what they owe over a longer period."

While many look to the personal insolvencies register for clues about the impact of the economic climate, there is a large section of Scottish society that don’t appear in the statistics but who face an equally hard uphill climb out of debt.

A spokesperson for Trust Deed Scotland Provider, Trustdeeds.net said: “The figures being predicted by PFK are disappointing, but may change depending on future economic growth in Scotland. As we come out of recession, we may see these figures begin to decline as unemployment levels go down and more jobs and hours become available due to businesses expanding.

“However, what the figures from PFK don’t show is the amount of Scots who are not insolvent but living on a knife-edge. There are tens of thousands of people living on the brink of financial collapse, just about making it from one pay cheque to the next. For them everyday life is a struggle and they probably spend most of their waking moments worrying about their debts.”

About Trustdeeds.net:

Trustdeeds.net provides comprehensive trust deed information about official, government backed trust deeds. They specifically aim to help those who are suffering from debt and who may find relief through these plans.

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