LILA is a scheme for the people having low income and fewest assets. It is that they do not have much savings to pay a debt back when their income is also low. Full form of LILA is low income low asset. When your income is low and there is not much asset left for you but you are drowning in debts you can try for LILA bankruptcy. LILA bankruptcy is a easier version of bankruptcy available to them who lives below a certain level of earning.
Who qualifies for LILA
Lila is specially designed for those people who live on the typical poverty. Basic points to qualify for LILA are:
Earning of the person is less than the minimum wage of forty hours of working in a week that is £247.60.
None of your assets are worth more than £1,000 each (£3,000 for a car), or £10,000 in total, and you don’t have your own home.
One must satisfy these facts to get into a LILA bankruptcy scheme.
Difference between Bankruptcy and LILA
There is not much difference between general bankruptcy, sequestration, and LILA bankruptcy. LILA is a version of bankruptcy to help them who do not earn much. However a general people cannot ask for LILA, it is secured for poor’s.
How to apply for LILA
The process of applying for LILA is just as the process of applying for Bankruptcy in Scotland. One has to fill a petition in the sheriff court with a fees attached which may exceed to £100. The court take on the petition and the petitioner has to satisfy the court that there are enough reasons to grant the petition the court may declare him to be LILA bankrupt.
How long will Bankruptcy Run
The LILA bankruptcy runs as long as the general one that is one year. After the court grants LILA an officer is set to take care of the rest. He takes into account about the minimum assets of the debtor and the loans he had taken. The officer tries to satisfy the creditors by selling his assets. After one year the debtor is discharged from bankruptcy.
Effect on Credit Rates
The effect on credit rates is same as the one on the general. The records remain visible for six years on your credit file. It is therefore difficult to get another loan. But any kind of debt solution affects credit rating.