How to apply for LILA

5 January2021

LILA, or the 'Low Income Low Asset route into bankruptcy', is only available to residents of Scotland whose situation prevents them from filing for bankruptcy (also called 'sequestration' in Scotland) the usual way.

If you meet the eligibility criteria, you can apply for bankruptcy through the LILA route by writing to the AiB (Accountant in Bankruptcy - Scotland's Insolvency Service) and asking for a Debtor Application Pack. You will pay an application fee when you actually submit your application. If it is successful, you will enter into bankruptcy.

As part of the agreement, your unsecured debts will be written off and your lenders will be unable to take any further action against you. It will, however, have a serious impact on your credit rating.

One of our advisers will be able to tell you whether you're likely to qualify for LILA, or whether you might need to consider a different approach to your debts.

Am I eligible to apply for LILA?

  • You must have debt that you cannot realistically afford to pay back.
  • You must be resident in Scotland.
  • You income must be lower than the equivalent to a gross weekly income from a forty-hour working week on minimum wage - currently 237.20 a week. Certain income and benefits are not counted.
  • You cannot have assets worth more than 10,000 combined - or any single asset worth 1,000 or more.
  • You cannot own, or jointly own, a property.

If you don't qualify for the LILA route into bankruptcy, but would still like help with your debts, you may be eligible for a Trust Deed or DAS (the Debt Arrangement Scheme), two other solutions which are only available to people who live in Scotland. You could speak to one of our advisers if you're not sure.

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Tags: LILA, Scotland, bankruptcy, debt, application, apply, apply for lila, AiB, Accountant in Bankruptcy

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