May 21, 2006

By Peter Kenny

Personal debt in Scotland now stands at a staggering £14.27 billion, with credit card debt accounting for over a third of this figure at £4.45 billion.

Deputy Enterprise Minister Allan Wilson revealed the figures through a written submission to the Scottish Parliament. It is feared that with the increase in personal debt, many Scots face losing their homes.

Personal bankruptcies rose to a record 5423, an increase of over 54 per cent over the previous 12 months. More worryingly was the fact that the number of bankruptcies being forced by creditors rose by an astonishing 71 per cent to 2746.

Deputy Enterprise Minister Allan Wilson said, “The 71 per cent increase in creditor awards is of particular interest. A sharp rise is seen in Scotland but not elsewhere in the UK”

The amount of bankruptcies being brought about by creditors in Scotland runs at twice the rate of the rest of the UK.

The figures shows that over 30,000 Scots are in severe financial difficulty while at the same time over 180,000 are currently struggling with £344 million in arrears. It has also been shown that women facing severe financial difficulties has doubled over the last three years.

It is the sheer scale of credit card debt that is the most disturbing. The current figures for credit card debt equate to £1500 for every working Scot. Many Scots are adopting the message of “buy now pay later” and with credit card companies being too generous in their credit limits, and not taking enough action to ensure a credit card applicant has the ability to repay their debt, we can expect many more people falling behind with their repayments.