Tribunal award and injury claim vs LILA

miss_watson

Hey everyone, my partner and i are in limbo at the moment waiting for the shortfall of the sale of our house and the sale of my boyf car that were both handed back this month before entering into a lila. The question i have is that I am awaiting a injury claim payout from an accident in august where i was shunted from behind and partner is waitin on a tribunal payout also what will happen if we are paid out before the LILA goes through and also what will happen if we are paid out after? I know that after we would have to notify our trustee and will be asked for a contribution from it and thats fine because they wont take it all away as i was hoping to try save some towards a deposit for rent or as a starter for the future when we can eventually get on the property market. But beforehand can we be made to pay towards our debts? I know they are our responsibility but I am still reluctant to pay all of our claim money out for the same reason. Hope someone can help,

Thank you,
Em
x

tigerfeet2006

In England you would have to give any part of the payment that was for loss of earnings if I remember rightly, I am guessing it would be something similar in Scotland.

Give National Debtline in Scotland a ring and check with them.

http://www.nationaldebtline.co.uk/scotland/

coolcait

If you get the payments before you apply for bankruptcy under the LILA regulations, and the payments are more than £1,000, then that would stop you being eligible for the LILA route, because you'd have a single asset worth more than £1,000.

If you spend the money, to make yourselves eligible for LILA, the Accountant in Bankruptcy will expect you to account for where it went. It might lead to you getting a BRU/BRO. It might also lead to the people you give the money being asked to repay it. Even if they hold out against the requests, it's likely to be stressful for them.

Is there any chance that you could use some of the payments to pay off part of your debts, and then go into a Debt Arrangement Scheme to pay off the rest? DAS would protect you from legal action from your creditors, it will protect your assets, and you might even be able to keep part of the payouts to put towards a deposit for rent etc.

If you'd be able to pay off your debts in under five years, then you have an excellent chance of being accepted onto DAS. If it's likely to take between 5 and 10 years, then the chances are still good. It's less common, but not unknown, for a programme over 10 yars to be accepted.

You can find out more about DAS on www.moneyscotland.gov.uk

HTH

miss_watson

Hi Coolcait, thanks for the reply, can i ask do you know what would happen if we get it once we are in the LILA? And also what is a BRU or BRO?

Thank you,
Em

coolcait

miss_watson wrote: »

Hi Coolcait, thanks for the reply, can i ask do you know what would happen if we get it once we are in the LILA? And also what is a BRU or BRO?

Thank you,
Em

I think that tigerfeet's advice would probaby hold true. The nearest thing I can find on the Accountant in Bankruptcy's website is this:

"Criminal Injuries Compensation


It is provided in Section 7(2) of the Criminal Injuries Compensation Act 1995 (replacing earlier provisions in section 117 of the Criminal Justice Act 1988, now repealed), that an award made under the Criminal Injuries Compensation Scheme to a debtor shall not vest in the trustee. It should be noted that the statutory scheme giving effect to this provision came into effect on 1 April 1996.


Awards resulting from claims made before 1 April 1996 are not covered by the Scheme; such awards do therefore still vest in the trustee as acquirenda in terms of Section 32(6) of the Act. This is of course without prejudice to the debtor’s right to apply to the sheriff under Section 31(6) of the Act, for an order exempting the award from vesting in the trustee.


Despite awards made in respect of claims made under this Scheme vesting in the debtor, it is open to a trustee to arrange an IPA or IPO in terms of Sections 32(4A) and 32(2) of the Act."


Sorry for using jargon before!

BRU - Bankruptcy REstriction Undertaking
BRO - Bankruptcy Restriction Order

BRU - you would agree to
BRO - would be imposed by the Sheriff court

This is what the AiB's guide to what it all means:

http://www.aib.gov.uk/guidance/publications/debtbankruptcy/bankruptcypostapril08/printfriendlybrobruguide

HTH