Bankruptcies rocket 309% in ten years

PERSONAL bankruptcies in Scotland have jumped by a staggering 309 per cent in the past ten years, spurred by spiralling house prices and "a culture of hedonism".

According to official figures analysed by Scottish debt solutions company Newtomorrow.com, there were 4,465 sequestrations – the Scottish term for bankruptcy – in 1998, compared to 13,814 in 2007.

In that period, the average house price north of the Border increased by 260 per cent, from £67,355 to £175,955 while average wages went up by only 138 per cent from £261 to £360 per week.

John Hall, chief executive of Newtomorrow.com's parent group Invocas, said: "The housing boom, low interest rates and an increasingly hedonistic approach to life during the last ten years has fuelled consumer spending, much of it on credit.

"Now the effects of a credit-driven lifestyle are coming home to roost with many householders struggling just to keep a roof over their heads."

According to Newtomorrow.com, the average Scot has £30,334 of unsecured debt, which does not include mortgages.

The credit crunch has also contributed to an increase in bankruptcies. It has forced lenders to increase their mortgage, loan and credit card rates.