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Scotland is becoming a nation of ‘credit junkies’, with nearly three times as
many going bankrupt this year as in 1990, according to the Institute of
Chartered Accountants of Scotland (ICAS).
According to Impecunias, an insolvency newsletter run by the institute together
with the Law Society of Scotland, increasing availability of consumer credit has
led to a massive increase in personal insolvency over the past 15 years.
Statistics published in the newsletter show that there were 4,353 protected
trust deeds (PTDs) and sequestrations.
A PTD is a voluntary agreement between a debtor and a trustee.
Sequestration is the legal terms for bankruptcy in Scotland.
The figures come as the Scottish Executive is implementing widespread changes to
the bankruptcy regime north of the border.
ICAS insolvency director Anne Bryce explained: "What’s clear is that since 1990
a generation of credit junkies has been created.
"The traditional caricature of the prudent Scot treating every penny like a
prisoner has been replaced by a 'must-have' consumer culture where people are
spending what they don’t have and can’t pay back.
"It’s good that ministers are responding to this rise by attempting to change
the bankruptcy regime but sadly the real problem lies with irresponsible
lending, something the executive can do little to change.
"What shouldn’t change is the most effective way to deal with many personal
insolvencies – the PTD. It offers creditors more money back at no cost to the
public purse and allows debtors to avoid the stigma of court-based
sequestration."
Source:
Getting Paid
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