Find answers to frequently asked questions about LILA

LILA could help you to:

  • Find a route into bankruptcy
  • Write off the unsecured debt that you cannot afford
  • Get back in control of your personal finances

Do You Qualify For

Call 0800 970 7673

Fees & Key information

Find out more about the fees involved with each debt solution.

Find out if you qualify for LILA

Tell us about your situation

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Useful free guides

Download the Insolvency Service guide to dealing with lenders.

Download the information package from Scotland’s Insolvency Service.

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What is LILA and how can it get me out of debt?

LILA is a debt solution for Scottish people. It is the Low Income, Low Asset route into bankruptcy and can help people with a very low income and few valuable assets to go bankrupt.

As with the normal route into bankruptcy, your remaining unsecured debt would be written off when you are discharged from bankruptcy - in most cases, after 12 months.

Do I qualify for a LILA bankruptcy?

First of all, bankruptcy will only deal with unsecured debts that you cannot afford to repay in any kind of realistic timeframe, so you can only qualify if you need to deal with unsecured debts that you can no longer afford.

The LILA route into bankruptcy is for people on low incomes with few valuable assets. To qualify, your income must be no more than £237.20 per week - which is based on a 40-hour working week at minimum wage.

If your weekly income is more than that, you could still be eligible if you receive income-based jobseekers' allowance, working tax credits or income support, because those benefits are not included in the income assessment.

Your assets would also be assessed if you applied. To qualify for LILA, you'll need to have assets worth no more than £10,000 in total and no single asset worth more than £1,000. Assets include savings, property and investments.

I don't think I qualify for LILA: can I still go bankrupt?

If your income is above the threshold and you don't receive benefits, your assets are more valuable than £10,000 or you have a single one worth more than £1,000, you may still qualify for the standard route into bankruptcy, or another debt solution.

Call 0800 970 7673 to find out if there's another debt solution that could help you.

Is LILA free?

Applying for LILA isn't free because you pay the same fees you would pay if you applied for a standard bankruptcy. You pay a one-off application fee of £200.

Will LILA leave me debt-free?

LILA is simply another way to go bankrupt and you can only clear unsecured debts through LILA. Only the part of your unsecured debts that you can't afford could be written off.

You would be expected to repay as much of your debt as you can with your assets, salary contributions, or any other contributions that you can afford - and you will only be free of all unsecured debt when you become discharged. In fact, you may be required to make further contributions in certain circumstances.

Are there any disadvantages with LILA?

LILA is a route into bankruptcy and the same disadvantages will apply: for example it will significantly affect your credit rating for six years, which can make it very difficult to borrow money during that time. During bankruptcy you can only apply for up to £500 of credit and you would have to ask the trustee's permission (the person who handles the bankruptcy) before you do so.

However, if your finances are a real concern, it's better to deal with them sooner rather than later, as your problems could get worse if you don't address them. Contact an adviser today to discuss your options.