LILA stands for “low income and low assets” and has been introduced to help those trapped between not being able to repay their debts and who were unable to declare themselves bankrupt. In many cases it may be a more appropriate solution than Protected Trust Deeds or the Debt Arrangement Scheme.

There was clearly a need for LILA sequestration. At the time of writing (October 2009) the number of bankruptcies in Scotland has soared as people seek to deal with the overwhelming debt they were previously trapped with.

To qualify for LILA sequestration the debtor must be unable to make the contractual payments on their debts and not have assets that could be sold to repay the debt.

Additionally their income must be no higher than the equivalent of the national minimum wage for a 40 hour working week (£229.20 per week in Summer 2009). You must have assets worth less than £10000 in total and no single asset can be worth more than £1000. You must not own or jointly own a house.

If the above conditions do not apply to you Protected Trust Deeds the Debt Arrangement Scheme and Debt Management Plans are all possible alternatives.

To apply for this form of bankruptcy you must apply to the “Accountant in Bankruptcy” for a “debtor application pack”. The fee of £100 will need to be paid with the application.

If you would like to learn more about LILA sequestration we’d advise that you visit the website of the Accountant in Bankruptcy.

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