Bankrupt homeowners on the rise in Scotland

The number of homeowners in Scotland going bust has risen over the last year, according to a new report.

Bankrupt homeowners have increased from 33% in 2008 to 47% in 2009, said accountants PKF.

The figures come as a record number of Scots are registering as bankrupt with the annual figure for 2009 expected to be around 24,000.

The average age when an individual is made bankrupt has fallen by a year to 42 but there has been a reduction in the number of those under 30 being made bankrupt which is down 15%.

However the average debt has risen by nearly £1,500 since 2008 and men are incurring much greater levels of debt than women.

The majority of those declared bankrupt are also middle aged.

Personal insolvency numbers in Scotland are currently double those of England and Wales.

Bryan Jackson, corporate recovery partner at PKF, said: “The figures are deeply concerning since they seem to indicate that debt levels in Scotland are increasing and hitting homeowners the hardest.

“But of great concern is the increase in homeowners who have been made bankrupt.

“This is probably the group who, during the housing boom, used rising equity in their homes to fund their lifestyles and now that this source of revenue has dried up they find themselves with limited equity and rising costs and are unable to cope.

“I think many will be surprised that it is the middle aged who continue to be, by far, the largest group affected by personal insolvency since there is an assumption that the young are the most likely to get into debt.

“Our figures indicate that it is the young who are being more cautious with fewer falling into bankruptcy than before.”

Mr Jackson added: “Whilst there is no easy answer to severe indebtedness we are currently witnessing record numbers of personal insolvencies and few signs that these figures are likely to stop rising.

“With Scots insolvency running at double the rate for the rest of the UK it is clear that we need to encourage fewer individuals into bankruptcy and ensure greater financial awareness among the population.”

source: STV.tv News