Credit crunch `to impact on Scottish bankruptcies`

The ongoing credit crunch and rising unemployment are likely to result in a rise in the number of Scots declaring `bankruptcy sequestration`.

This is according to accountancy and business advisory firm PKF, which said that more than 25,000 people living in the country could face such a situation over the next 12 months, the BBC reports.

The company suggested that, when the final figures for 2008 are calculated, over 20,000 consumers in Scotland will be subject to sequestration or a protected trust deed.

Bryan Jackson, corporate recovery partner at PKF, said: "What is more remarkable is that we are in the early stages of the recession and yet already we are seeing so many people unable to cope financially and taking the drastic step of being made bankrupt."

The expert went on to say that the statistics are a reflection of the fact that there has been a "degree of unreality" over the last few years concerning the way in which people have financed their lives.

Meanwhile, Donald MacLeod, head of Sainsbury’s credit cards, recently said that more consumers are relying on credit cards as opposed to debit cards to purchase goods and services.