Lothians are Britain's bankruptcy hotspot

Bankruptcies in Scotland have soared by a third in the past year, according to the quarterly report by the Insolvency Service.

Collating figures provided by Accountant in Business and Companies House, the report showed that nearly twice as many Scots are facing bankruptcy as those living south of the border.

Between March and June well over 6,000 Scots were made bankrupt, a 10.5 per cent rise on the previous three months and 33 per cent up on the same period last year.

Fergus Ewing, Scottish minister for community safety, rejected the rise in personal bankruptcies, and instead focused on business debt, saying: "The bankruptcy figures this quarter are much the same as last quarter.

"There has been a small decrease in the number of Scottish companies becoming insolvent this quarter even in difficult economic times. These quarterly statistics are high, although not as grim as some may have expected."

The Lothian and Borders region saw the second largest rise in cases of personal insolvency in Scotland, with a rise from 675 to 1,298 cases - up 92 per cent. This represents roughly 11 people going bankrupt every working day.

With unemployment continuing to rise, along with continued restrictions in credit availability and rising inflation, it is thought that insolvency figures will continue their ascent.

The Scottish Government and Accountant in Bankruptcy have proposed plans to make it easier for individuals to claim bankruptcy through a fast track protected trust deed. They also aim to make it far more difficult for creditors to make claims against assets in the form of property owned by insolvent individuals.

First Minister Alex Salmond addressed rising unemployment when delivering the SNP's legislative agenda for the new parliamentary session last week. He said: “We must ensure that people who become bankrupt are not made homeless unnecessarily.

"A debtor protection bill will increase protection for people who are facing repossession or bankruptcy. It will require lenders to demonstrate that they have considered reasonable alternatives to repossession."