Bankruptcy is an approach struggling borrowers could take if they have a significant amount of unsecured debt they simply can’t afford to repay in a reasonable timeframe.
If you’re a Scottish resident in this situation, there is an alternative route into bankruptcy available: the LILA (Low Income, Low Assets) route. As the name suggests, it’s designed to help struggling borrowers with a low income and few valuable assets, who need to go bankrupt but can’t take the ‘traditional’ route into bankruptcy.
Here we’ll take a basic look at what the LILA route into bankruptcy involves, and what it takes to qualify.
What is the LILA bankruptcy route?
Bankruptcy is a form of insolvency, typically seen as a ‘last resort’ for seriously struggling borrowers, that’s available throughout the UK.
However, in Scotland only, the LILA – or Low Income, Low Assets – route into bankruptcy is available, which could help people on a low income who have significant debts they have no way of repaying, and few assets to put towards them.
Could I qualify for the LILA bankruptcy route?
The LILA route into bankruptcy is a specific approach to debt problems, designed to help people in a specific situation. It isn’t open to all Scottish residents with serious debt problems: there are some extra criteria you must meet to be eligible.
To qualify for the LILA route into bankruptcy, you must meet the following criteria:
● You must not have any personal assets worth more than £1,000 each, or £10,000 in total,
● You must earn no more per week than the standard national minimum wage for a forty-hour working week: £237.20 at the time of writing.
How can I find out if the LILA route is suitable for me?
If you’re a Scottish resident struggling with your debts, it’s important to get advice from a professional sooner rather than later. Even if the LILA route into bankruptcy isn’t suitable, there may be another debt solution that is ideal for your situation.