Hi Laura

Have you spoken to an advisor about the LILA and the sequestration process?

It's natural for people to assume the worst in situations like this, but in my experience it's quite the opposite. The fact that it's a LILA application shows there are no assets to deal with. If your Mum bought the goods, you would be unlikely to be able to repay her as an ongoing expense. There should be no issue with her paying for the wedding and certainly it doesn't stop you getting married. You also get to keep the kids & pets 🙂

My advice is always to sit down with an advisor and run through the whole process. The fear of the unknown is normally the worst thing, but 99.99% of there time the LILA will run with no issues whatsoever.

Mark

Thank u for getting back to me so soon. I spoke to debt advisory Scotland yesterday and was hoping to consolidate all debt which is between 4500-5500 at present into one lump sum but as my earnings a week is just under £111 not including tax credits they said it would be much better for me to go down LILA route.... This has scared me as I'm only 25.... We have landed in this mess as my partner has been unlucky and was paid off from 4 jobs in space of 3 years due to companies going into liquidation..... Debt advisory Scotland also told me to open a new bank account when should I do this???

Hi Laura

No problem, we're both up too early.

The other option I suppose is DAS where you could repay the debt over a longer period. The length of time will obviously depend if you have a surplus you can pay monthly and the amount of that surplus. LILA may be an option if there is little or no surplus. I mentioned earlier, the LILA process seems scary, however it's actually fairly straightforward.

If your bank are one of the creditors, it's always wise to open up a new basic account ASAP. Even if they are not, it's good to have one for emergencies.

Mark

Yes 2 of my banks are creditors 🙁 I think I will fone up debt advisory Scotland again today to see if LILA Is the best was to go or if I can go the DAS route..... Just want it all sorted do I can enjoy our wedding and married life without the worry if someone always chasing me for money..... My mum is an accountant so shall also speak to her and seek her advice to.... Yes I am back from nightshift and can't sleep as too much to think about 🙁 🙁

Well I'm still in a flap, debt advisory said best way is LILA as we would be better off paying 200 and the strongly think we wouldn't be asked to pay any more than that, on the other hand my mum thinks DAS...... I could cry, looking at finances if I pay a monthly sum to DAS off a minimum of 100, I'd stil have bills of 110 a week, leaving 90 to spend on toiletries, shopping, dog n car food, and kids clubs which a week is £5.... So it's looking more like LILA. Exactly what do u normally need to provide evidence wise and do u pay the £200 in one sun or can u pay it up ?

Hi Laura,

Try to stay positive as you have options to deal with your financial troubles it's just working out which one best suits your circumstances.

A ÔÇ£LILAÔÇØ is a route into Sequestration (Bankruptcy). In order for someone to be declared bankrupt in Scotland they must meet certain criteria. LILA stands for ÔÇ£Low income, low assetÔÇØ and is a criteria to qualify for Sequestration. Don't get distracted by the LILA name, you will be officially in Sequestration (Bankruptcy) so you need to be sure and understand everything. That's why it's always a good idea to sit down with an advisor that has hands on experience of dealing with Sequestrations. Some firms and organisations will give general advice on how a Sequestration will work but haven't actually had hands on experience of dealing with Sequestration cases.

To enter Sequestration you need to submit an application to the Accountant in Bankruptcy (Scottish Executive who are responsible for administering and overseeing Sequestrations) and you will then be declared bankrupt. You don't need to attend court and no one should find out about it as it isn't advertised in the press etc. The cost of submitting this application is £200. You can pay this up in instalments. All of the information regarding this is contained in the Application form. If you wish, I can organise for an application pack and information to be send out to you. You need to provide your last 3 months bank statements or payslips, details of your debts, a tenancy agreement if you're in rented accommodation and also details of any benefits you receive. The application pack is very straight forward to complete.

The Accountant in Bankruptcy will then either keep your case internally to administer or pass it out to one of their three panel of approved agents. We are one of the approved agents who work with the Accountant in Bankruptcy and currently receive 60% of cases which the Accountant in Bankruptcy pass out. It's our job to speak with everyone, inform them of what happens next and to them complete a detailed questionnaire with them.

The Questionnaire that we complete with every client will ask you just basic personal information i.e. your name and address, who you bank with, if you have any assets, who you have debts with and also an income and expenditure. We need to complete an income and expenditure with a client to establish if they can afford to make a weekly/monthly contribution or not. We take into account all of a clients expenditure so don't worry about not being allowed to pay for things like dog and cat food. I have a dog and a cat and know how expensive they are as pets! The weekly/monthly contribution can be set as low as £5 to £10 per week or £20 to £40 per month so the majority of people can afford to pay something back. If it's determined that you can afford to make a payment you would be required to pay this for 36 months. If it's established that you cannot afford to make a reasonable payment then you would not be required to.

Your creditors can no longer pursue you for any of the debt and after 1 year of the Sequestration you will be automatically discharged and be debt free. Things will only last longer than this if you are making payments.

The downside is that it will have a big impact on your credit rating. At the moment though I suspect that your credit rating will be pretty bad if you haven't paid things. Eventually your credit rating will repair and you will be able to secure credit but it will take a couple of years.

Sequestration is really nothing to be scared or intimidated by and by sitting down in person with an advisor that regularly deals with Sequestrations they can give you a clear picture and understanding of how things will work. It will give you that breathing space from dealing with your debts and also give you a light at the end of a tunnel.

Sorry it's a bit long winded but it's hard to get everything across on a forum with regards to how Sequestration works in detail...

Hi David, thank u for the info, that's s lot more info than I got speaking to debt advisory Scotland, they said they would send out a pack, if this is not the correct one I would be so grateful to u to send me a pack out as I really want it sorted before we get married, thankfully my parents r paying for that as my partner and I been together 10 years.... I hadn't told anyone bout debts until now as was scared and ashamed.... But it's at a stage my health affected due to the stress.... If u require my address please feel free to email me and I shall email my home address.... This forum has totally helped me understand and defiantly think bankruptcy is the best way as I just can't afford to pay my debts and just want light at end if tunnel

Hi Lauram2902.

David doesn't have any access to the details that you used to register for the site, including your email address.

If you'd like him to send out a pack to you one option would be to fill in the "Contact David" form (click the button in his forum post signature) and provide him with the address details that way.

Hi Laura,

No problem. I realise that it's a very worrying time and especially when you start to speak about ÔÇ£BankruptcyÔÇØ which can be quite a scary word.

The pack which they should send you out should be a ÔÇ£Debtor Application PackÔÇØ. You can also find this application pack on the website of the Accountant in Bankruptcy. The website address for that is www.aib.gov.uk. On the website if you use the search box at the top right hand side and type in ÔÇ£Debtor Application PackÔÇØ it should bring this up as the first search result. You can also find out more information about Sequestration on this website. As TDA said, click the ÔÇ£Contact DavidÔÇØ form and provide your details and I can send you out all the information you need if you want.

It can be difficult to get specific advice with regards to exactly how Sequestration will work unless you speak with an advisor that has hands on experience of dealing with Sequestration cases. I help and assist a number of Citizens Advice Bureaus giving their clients advice on exactly how the Sequestration process works as often it's the fear of the unknown that really worries people.

In terms of how quickly it can be sorted it really comes down to how quickly you can get the pack completed and pay your £200. You could have it sorted within 1 to 2 weeks if you really wanted.

It normally takes something to force people to open up and speak about debts but when they do normally there is a lot of support and help both from family and friends but also places like this forum.

Thank u to u both have used the contact button you may have a couple emails as it kept saying error.... But all info is enclosed I am starting to feel a bit better just good to know am on the right track

Hi Laura,

Got your details. Application pack along with information is coming out to you in the post this evening.

Once you receive it give me a call and I'll talk you through completing it.

Keep the questions coming Laura,that way you can be sure of the best route forward. It is scary but rest assured you will get the best info from those on this site.

Paul

Hi Paul thanks, I do have another question.... I was told to open a new basic bank account, which bank is best to go with? I have 2 accounts with hbos which are creditors so will need to go with a different branch, in my town we have royal bank of Scotland, Clydesdale, Lloyd's and Santander.....

Hi Lauram2902.

I'm afraid you're pretty restricted if you're becoming bankrupt.

I understand that Barclays is currently the only well known bank that offers a bank account to undischarged bankrupts. If you open an account elsewhere you risk it being closed suddenly if/when they become aware.

There are also some paid-for accounts for which LILA or any other types of credit issues would be a non-issue. You could probably do without the extra cost if avoidable though.