Low Income Low Assets Scotland

If you live in Scotland on a low income with very few assets and struggling to pay your debts you may be able to access a form of bankruptcy or sequestration which is specifically tailored to your needs called LILA.

LILA or Low Income Low Assets is a form of bankruptcy designed for those who, until recently, couldn't afford to access the traditional form of bankruptcy in Scotland. However, since 2008 this new route into bankruptcy has been available to people who meet the following criteria:

• Living Scotland or have lived in Scotland over the past year
• You must owe £1500 or more
• Been at least 5 years since a previous bankruptcy
• Unable to meet debts when they become due
• have a weekly gross income of no more than the standard week national minimum wage which equates to £237.20, inclusive of maintenance and pension payments.
• Do not own or have a share in any property or land
• No one asset is worth more than £1000 or collectively more than £10,000

You are deemed to have met the criteria for a LILA if your income is greater than £237.20 as a result of receiving either income support, working tax credits or income-based jobseekers. However, there is an application fee which must be paid and which is £100. The beauty about this type of bankruptcy is that you don't have to wait until a creditor takes formal action against you before going bankrupt.

LILA Restrictions

• You are required to inform the trustee of any financial windfall or if you have inherited any property.
• Unable to act as a Member of Parliament, be a member of local government or a school board or act as a Justice of the Peace. ( Ed - I don't understand the reasons behind this but there you go!)
• Cannot obtain more than £500 of credit without prior consent from the trustee
• Start or be involved in the day to day running of a limited company.
• ask your trustee about other restrictions as there are other which need a bit more explanation

The consequences of failing to meet these restrictions is that you are at worst committing a criminal offence which may result in your imprisonment and or you may have the period of your bankruptcy extended.