LILA Question (Scotland)

GoingForBroke

Hey guys!

I'm looking at going bankrupt through the LILA route. I've found loads of great advice and info on the forums, however I do have one question:


As it stands, I'm on JSA and I qualify for LILA. However, there's a chance that I may be offered some work that will pay above the LILA threshold in the next week or two. If I start a job before I'm made bankrupt, could the LILA bankruptcy be declined? Is it in my interest to delay the start date of the new job until after I'm made bankrupt officially?

coolcait

Would the new job, and the new salary, put you in a position where you didn't need to go for bankruptcy? When you're weighing up your options, don't forget about that one too.

I think that the Accountant in Bankruptcy look at your circumstancs on the date you put in your application - just like the courts used to (AIUI).

So, if you applied for bankruptcy under LILA, at a time when you met the criteria, it should be OK. Even if your circumstances changed after that point.

Don't forget that, once you're bankrupt, the law says you have to inform your Trustee of any changes in your circumstances.

HTH

GoingForBroke

Thanks so much for replying so quickly, coolcait!

Unfortunately, I would still face bankruptcy, despite earning above the threshold. I've spoken to a lawyer and sought debt advice so I'm ready to send off the application.

I'll send it off as soon as possible. Have you ever heard of complications arising from this scenario? I'm aware that I would have to disclose my change of circumstances and that I may have an IPO imposed.

mickey54

coolcait wrote: »

Would the new job, and the new salary, put you in a position where you didn't need to go for bankruptcy? When you're weighing up your options, don't forget about that one too.

I think that the Accountant in Bankruptcy look at your circumstancs on the date you put in your application - just like the courts used to (AIUI).

So, if you applied for bankruptcy under LILA, at a time when you met the criteria, it should be OK. Even if your circumstances changed after that point.

Don't forget that, once you're bankrupt, the law says you have to inform your Trustee of any changes in your circumstances.

HTH

I am sure that if your circs change within a year - ie - return to work- you can still be asked to pay back to your creditors, by setting up an IVA or das . . depending on income, obviously.

GoingForBroke

mickey54 wrote: »

I am sure that if your circs change within a year - ie - return to work- you can still be asked to pay back to your creditors, by setting up an IVA or das . . depending on income, obviously.

Are you suggestuing that the bankruptcy would just be cancelled/annulled in favour of an IVA???

To be honest, I don't think that's the case. As far as I know, it would simply mean an IPA would be applied.

coolcait

mickey54 wrote: »

I am sure that if your circs change within a year - ie - return to work- you can still be asked to pay back to your creditors, by setting up an IVA or das . . depending on income, obviously.

Once you're bankrupt, you're bankrupt. Unless you decide to petition for recall (or, if a creditor made you bankrupt, but acknowledges they were wrong to do so, they can petition for the recall). Recall basically puts you back to a point where it's as if you'd never been bankrupt. It can be a costly process.

You can't set up a Trust Deed (IVA equivalent) or DAS if you're bankrupt. And, since we're on the topic, you can't go into DAS if you're in a Trust Deed, and you can't sign a Trust Deed if you're in DAS.

What can happen is that if a person's circumstances change after they've been made bankrupt, but before they've been discharged, they can be asked to sign an Income Payment Agreement (IPA), depending on income. That might be what you had in mind.

coolcait

GoingForBroke wrote: »

Thanks so much for replying so quickly, coolcait!

Unfortunately, I would still face bankruptcy, despite earning above the threshold. I've spoken to a lawyer and sought debt advice so I'm ready to send off the application.

I'll send it off as soon as possible. Have you ever heard of complications arising from this scenario? I'm aware that I would have to disclose my change of circumstances and that I may have an IPO imposed.

I haven't heard of any complications arising from this kind of scenario - other than an IPA! But you've already considered that.

I suppose that it depends on how far above the minimum wage threshold your new job takes you. Even then, if your new salary was thousands a month, I don't think that they could do any more to you than hit you with a huge IPA. Especially if you can show that you've received debt advice which led you to believe that bankruptcy was the only option.

HTH

GoingForBroke

I've just started filling out the forms for the LILA bankruptcy.

Is it necessary to fill it out with the help of a CAB representative? As mentioned, I might be in employment soon so there is a time constraint on my eligibility for LILA so I really can't afford to have my application rejected.

Is it possible to arrange an 'emergency' CAB appointment - tomorrow, for example - so I can just make sure everything is ok with the forms before I send them?

elaine77

Its certainly worth a try.
I used the Trading standards money advice team they were fab, very quick and very knowledgable (much like the guys on here! lol)
Good luck x

GoingForBroke

Thanks Elaine77! I'll add those guys to the list of people to call tomorrow. I've made a plan of things to do and people to see so I keep my head together!

elaine77

Its amazing how quickly it happens once the ball gets rolling, I feel the Scottish route is far less stressfull. Only costs £100, no court appearance and no interview with or. Simple.
Its how it should be its such a difficult and stressfull decision which despite what some people think, we dont take lightly.
Best of luck with it all
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