Separated debtors - Scotland

Separated debtors are the most likely to be made bankrupt

Singletons biggest users of protected trust deeds

Indebted individuals whose relationships break down have the bleakest financial outlook, with bankruptcy the likeliest outcome for one in five, according to personal debt solutions provider newtomorrow.com.

According to figures compiled from calls to the helpline of newtomorrow.com, 17 percent of separated debtors were made bankrupt while 29 percent entered into a protected trust deed – which sees a proportion of debt paid off and the remainder written off after three years.

This compared to 11 percent of single people being sequestrated and 37 percent entering a protected trust deed, while married couples are least likely to enter insolvency, with only nine percent being made bankrupt and 22 percent signing up for trust deeds.

While married couples have the highest unsecured debt, the average caller owing £40,648, they generally had two incomes, whereas separated debtors only had one income but the second-highest level of debt – an average of £33,065. Single people on average owed £25,305.

Ian Wright, managing director of newtomorrow.com, said financial troubles were a major concern in relationship breakdowns, with previously-shared household bills becoming a sole responsibility. Married couples also tend to have lower costs for things like insurance.

Ian said: “The breakdown of a relationship has many financial implications: a reduction in net income and an increase in outgoings on bills such as mortgages, food bills and transport.

“With the divorce rate so high in the UK, more and more people are finding themselves in financial difficulties after separation but seeking professional advice can be very beneficial, particularly where a marital home is owned.” 

 “We are finding that in the current market banks are more open to proposals to settle debts with lump sum payments from house sales and remortgages, but allowing significant debt forgiveness.”

The figures also show the average income, expenditure and difference (in brackets): of the different groups

·                    Divorced                         £1,333,           £1,088,           (£245)

·                    Married                            £2,091,           £1,671,           (£420)

·                    Separated                       £1,494,           £1,300,           (£194)

·                    Single                              £1,183,           £903,              (£280)

·                    Living with partner          £1,806,           £1,479,           (£327)

·                    Widow/widower             £1,118,           £842,             (£276)

According to figures from the Office for National Statistics, in 2006 there were 13,014 divorces in Scotland and 132,562 in England and Wales. In the same year there were 29,989 marriages in Scotland and 236,980 in England and Wales.