Scottish and English debt laws are different, so if you are a Scottish resident and have questions on debt, then this is the place to post.

Moderators: TalbotWoods, JaneClack

By Obelix
#471523 Hi, I'm in major debt to the HMRC and a few others, and am looking at declaring Low Income Low Asset (LILA) bankruptcy, as I live in Scotland. Info about this on the web is quite thorough, but there are two questions I haven't been able to work out:

1) I value my car at less than £3000 (bought for £3500 in Oct 2012, but used hard with higher than normal wear & tear since then). I live on a rural farm, and use the vehicle to get to work in remote forestry areas, as I'm a forestry surveyor. Will this car be seized and sold, or will I be able to keep it for work?

2) Do I absolutely need a Certificate of Sequestration, or will the extensive financial details that I will be filling out in the debtor's pack be sufficient? I would prefer to avoid getting this certificate, as it means an expensive trip into the city and I'd imagine a fee towards getting it compiled and issued.

Thanks...
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By TalbotWoods
#471524 Hi and Welcome

I would urge you to have a read of this document that is maintained and updated by the AiB "Debtor's Guide"

It opens as PDF Document and outlines the requirements for Bankruptcy in Scotland.

For example providing you qualify for a LILA Bankruptcy there is no need for a Certificate of Sequestration (pages 5 & 6) but be aware AiB is quite rigid regarding the Low Income, what you consider as being on a low income, may actually fail the low income criteria. At present that means a MAXIMUM pay income of no more than £252.40 per week BEFORE deductions based on 40 hours at £6.31 (current minimum wage)

With regards vehicles in LILAs, a car is allowable with a value up to £3000, but again because you think a car is worth less than £3K does not mean it is. You would be wise to check this out via Parkers or/and Glasses Guide to make sure, because you can be sure they will check them! I think because of your genuine occupation need then you will satisfy the need for a vehicle.

One thing that does seem to come up quite frequently is they will need to be sure you have sought professional advice before entering into LILA, so it may well pay to contact one of the debt advice organisations that are recognised by AiB, such as:

Money Advice Scotland

Citizens Advice Scotland

National Debtline Scotland

PayPlan

StepChange Debt Charity

In fact that is actually the very first question asked on the Form 9 application pack.

Another reason to seek advice is that though the form does look straightforward, some of the answers are not always, and if you answer incorrectly then the LILA will be rejected. Coupled with the fact if rejected you loose your £200 application fee, it can make is an expensive mistake!

Tim
By Obelix
#471525 Many thanks for the info, I'll be arranging an appointment with the CAB for some formal advice, and will go have a look at Parkers.

As far as my income goes, I'm self-employed, but haven't submitted tax returns since starting my work in 2012. I was a student at the time, and under the mistaken impression that students didn't need to pay tax. If only! As I'm in the process of doing all the previous years' self-assessment tax returns at the moment, I'll be able to confirm if my yearly income averaged out at less than minimum wage each year, which I'm 99% sure it did. Hopefully this method will be sufficient for determining if I'm eligible for LILA.

Once again, your advice is much appreciated.