What can I do if I don’t qualify for bankruptcy?
In Scotland, it’s only when your lenders begin legal proceedings against you that you can go bankrupt, so LILA, or Low Income Low Asset, bankruptcies, were introduced to help people who weren’t able to go bankrupt the ‘normal’ way.
Qualifying for LILA
You can only apply for the LILA route into bankruptcy if you qualify as having a Low Income and Low Assets.
To qualify for LILA, your weekly income must be no more than £237.20, which is the equivalent to a forty-hour week on minimum wage.
Your possessions and assets (including savings and investments) cannot be worth more than £1,000 each, although your car can be worth up to £3,000. In total, your combined assets must be worth less than £10,000. There are other qualifying criteria – you can click here to get more information on LILA.
If you do decide to go bankrupt, a LILA bankruptcy remains on your credit record for six years. It can be very difficult to borrow money or obtain certain financial products with a history of bankruptcy.
Other debt solutions in Scotland
If you live in Scotland and you’re considering LILA bankruptcy because you’re struggling to pay back credit cards, loans or overdrafts, remember that LILA is only one option. Before applying for LILA, it’s essential to look at other ways to repay debt.
Bankruptcy is usually a last resort – you may be eligible for a Trust Deed, or the Debt Arrangement Scheme (DAS). Talking to an expert will let you discuss your situation and hopefully find a suitable way out of debt even if you don’t qualify for LILA.
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