SCOTLAND BECOMES A NATION OF CREDIT JUNKIES 9 May 2006

Nearly three times as many Scots are going bankrupt in 2006 than in 1990. The statistics, published in the 60 ^th edition of Impecunias , the newsletter for the insolvency profession, suggest that the increasing availability of consumer credit has led to a huge rise in personal insolvency over the past fifteen years.

The figures, compiled from government statistics, show that in 1990, there were 4,353 Protected Trust Deeds ( PTDs ) and Sequestrations. This year, that number is 12,280. A PTD is a voluntary agreement between a debtor and a Trustee to pay back a proportion of debt to creditors. Sequestration is the Scots legal term for Bankruptcy.

The figures come as the Scottish Executive is implementing widespread changes to the Bankruptcy regime in Scotland .

Commenting on the increase in personal insolvency, ICAS Insolvency Director, Anne Bryce said, Whats 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 The traditional caricature of the prudent Scot treating every penny like a prisoner has been replaced by a must have consumer culture, where people are spending what they dont have and cant pay back.

Its 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 that the Executive can do little to change. What shouldnt change is the most effective way to deal with many personal insolvencies the Protected Trust Deed. It offers creditors more money back from debtors at no cost to the public purse and allows debtors to avoid the stigma of court-based Sequestration.

NOTES TO EDITORS

1.

The Institute of Chartered Accountants of Scotland (ICAS) is the world's first professional body of accountants, receiving its Royal Charter in 1854.   ICAS has over 16,000 members worldwide and the CA designation is reserved exclusively for their use in the UK .

2.

Under the Royal Charter, the Institute works in the public interest.     The objective of ICAS is to uphold the integrity and standing of the profession of chartered accountancy in the interests of society and membership, through excellence in education and the development of accountancy and through service to members and the enforcement of professional standards

3.

ICAS is the fastest growing accountancy body in the UK in terms of worldwide student numbers with latest figures ( Source : Professional Oversight Board For Accountancy (POBA) - Key Facts and Trends in the Accountancy Profession) showing a student growth rate of 94% between 1998 and 2003. It is the only UK professional accountancy body to both educate and examine all of its students.     The CA qualification is known around the world for consistency and high standards and ICAS enjoys a widely recognised reputation for providing the 'gold standard' in accountancy education.

Contact: Jonathan Milne at ICAS 0131 347 0306    Email: publicrelations@icas.org.uk