LILA ..need a lot of help and advice.

Janey51

Hi to everyone and I hope you are patient because this may take a while
I will try to keep it brief initially.

Large amount of debt following redundancy and a failed business eventually forced my husband and I to enter a DMP with CCCS( as it was then.)
We lived in rented house which was at a very low rent as my husband worked part time for the owner to make up the difference.
About 18 months after his redundancy in 2008, my husband died suddenly following major surgery. He was 56 and I was (and am) devastated. No insurance as he was unable to take it out.
Although we were paying a good amount to our DMP (£400pm) it was going to take many years to clear.
Following his death my payments to the DMP went down drastically

Following my annual review in Jan 2013 I was told the DMP would finish in 36 yrs time when I will be 96 :eek:
CCCS had been suggesting LILA for 3 yrs and I finally agreed to think about it.
I read everything on here and spoke to a CAB Money Advisor in the office of the Accountant in Bankruptcy who agreed that LILA was my best way forward.

I am on pensions (NHS and husband's works pensions) totalling approx £855 pm after tax. I do not work now as I am fragile mentally.
Assets...I have a car worth £3,500 ish which I know is £500 above the limit. The Money Advisor said I have a good case for keeping it because I am the only person who can drive to visit my Mother who is in a Home suffering from Dementia. The home is a mile off the bus route through open countryside. No taxis as very rural.
One of my sons would pay the difference if I am permitted to keep it.

I have some questions.
1. Just before my husband died, I received some money following a house fire (mice ate through wiring) and I had money from a successful Equal Value Claim.
Although we should have offered this to our creditors, we used some money to pay for my husband to have a Gastric Bypass. He was over 30 stone and was not going to survive much longer. He died a month later from a Pulmonary Embolism and the post mortem showed he was a disaster waiting to happen.
2. I bought a car..an insurance right off so cheaper...and the house was over a mile from a bus route with 1 bus a day so an essential. This is the same car I have now.
3. I went to visit my sister in Bulgaria as I needed her support
4. I used the remainder for living expenses. When I moved into the town where I live 2 and half yrs ago (bullied into it by my family as I could not afford to heat the house I was in with oil costing £500 a month and then nearly dying of pneumonia) I had to buy carpets etc.

In Oct 2012 there was £4000 left in an ISA which I cashed in. I bought a dog at my GP's suggestion as I was going insane with grief and loneliness. She has saved my life and I no longer want to commit suicide.

Oh I am sorry this has rambled on so much.

I meant to be concise. But so many emotions racing through my head.
Will the AiB condemn me for what I did?
Apart from my car and a couple of gold rings I have nothing of any value.
I do have a Moorcroft vase which was a second and I paid £100 for a few years ago.
My TV is old and cost me £50 off my son.
I only go out about once every couple of months as I don't like to be away from familiar things.

I really don't know what I want you to say if I am honest.
It helps writing it down and believe me, there is so much more. Car crashes. Operations that went wrong for me. Illness. Terrible depression...I had bereavement counselling a few times. And Cognitive Behaviour Therapy.

The Money Advisor at the AiB's office told me to fill in the application and go and see the local CAB to get it checked which I will.

I did have some Building Society Savings Accounts but they are totally empty by now. I am not sure if I have all the account numbers. I really can't remember how long ago it was for most of them.

And I have Enduring Power of Attorney for my Mum which I know has to go but my sis does not want to take it over. I had thought to set up a standing order to pay her Nursing Home Fees for 2 years and arrange for a SO to be paid to my sister so we can get things for Mum and keep her personal account at the home topped up to pay for her magazines and hair appts....I could do this now before I apply for LILA.

Oh heck. Sorry again for so much waffling.

laurel48

Hello Janey

I am sure someone will come along with a lot better advice but I was just wondering with what seems to be a number of questions you have whether it would be better to write them down and either contact who you have your DMP with or the CAB as they would probably be able to give clearer advice on it all should you now consider a LILA.

Good luck with it all.

Janey51

Thanks Laurel. I have spoken to CAB and Stepchange but I just wanted to speak to someone who had been through this personally. I am told by all that the decision is mine which I know but I am so frightened of what will happen. It's not as if I have a lot to show for the savings that went although all my payments for rent etc are up to date and I can live within the budget I was given very happily. I wish I could make a decision because whatever the AiB does, it can't be worse than the worry and sleepless nights. I really can't take another knock.

Janey51

Can anyone help?

coolcait

It's always hard to reply to threads like this one, because there are no guaranteed answers.

All we can do is break it down into the best case scenario and the worst case scenario (as best we can tell).

Best case scenario?

Your bankruptcy is awarded; AiB don't ask any questions about the money you received after the fire. Or, they do ask questions, and are satisified with your answers.

So, you'd be discharged after one year. It seems unlikely that you'd be able to pay an IPA on your income. Even if you did get an IPA, you'd finish paying it in three years.

Worst case scenario?

AiB investigate. They decide that a Bankrupcty Restrictions Undertaking (BRU) or Bankruptcy Restrictions Order (BRO) would be appropriate. It's likely that any BRU/BRO would be for a maximum of two or three years.

So, that would be a further two/three years when you wouldn't be able to be an MP, or company director. You wouldn't be able to get credit above a certain level, without telling the lender about the BRU/BRO. And so on.

Back in the real world, it's unlikely that you'll get further credit for while anyway. Do you really want to be an MP or company director right now?

If not, how much will you really be affected by a BRU/BRO?

And, if you accept the BRU, the only public record will basically say "a woman aged xx from [wherever] accepted a BRU for two years, because [bankruptcy technical language for using money which could have gone to creditors]".

Please go and talk to a CAB adviser, or similar, face to face, and let them know of all your worries. They will probably have seen hundreds of cases - even thousands - and can probably give you a better idea of how likely (or not) you are to have problems.

Katief07

I dont know really how much help I can be but I will give you my experience of the process of LILA bankruptcy, I was awarded LILA Bankruptcy on 18 Nov 12, honestly after about 3 years of being stuck in an financial and emotional hell hole it is by far the best thing I have done to resolve the awful financial situation I have found myself in. Contact your Local CAB they are amazing!! I had to wait about 8 weeks for an appt. so do it quick you will need to fill out a form for them with income and expenditure, your details etc, then they will give you an appt, and help you fill out the Bankruptcy forms, you don't even need to get them before hand they have them, but obviously if you have got them take them with you.

They will most likely be able to advise on some of the other questions you have.

I am not sure if they would look in to the past financial issues, they certainly did not with me and there were things that they could of and I thought would have been questioned, It is possible that the AIB with delve further but certainly for me I have heard nothing from them other that the letter containing the Bankruptcy award notice, Again I am sure someone at CAB may be able to advise more on this.

re power of attorney, I am completely stuck on this one, if going BR would you have to give this up/pass on to another family member ?? what if there was not one else?

The car may not even become an issue, but it if does if you have the difference (or access to), then that will obviously help.

You need to Pay the £200 to the AIB before sending off the paper work and they will give you a reference number to put in with your paperwork, Please remember LILA Bankruptcy is difference to Bankruptcy, I found it incredibly difficult to find useful information on it before going though with it.

I have probably rambled on sorry!, I hope there is something useful in my ramblings, First thing I would do it make an appointment to speak with someone at CAB and then take it from there. I am so glad I done it, don't get me wrong life is still tough at the moment but there is light at the end of the tunnel and much less worry leaning on my shoulders.

take care Katie xx

Katief07

P.s. with LILA if you are not having to make contributions. It is discharged after one year, but if you are making contributions you will most likely have to make them for 3 years. But if you are not working at present and your income if low or if there is little disposable income after your essentials etc, then you will likely be discharged from LILA 1 year after it is awarded.

coolcait

Katief07 wrote: »

.., Please remember LILA Bankruptcy is difference to Bankruptcy, ..

Hi Katie

I'm sorry to have cut your excellent post so dramatically - and I hope that the OP and others read the full version, because it has lots of good advice and information.

I just want to point out that LILA is bankruptcy. 'Low Income Low Asset' is just one of the ways that you can enter bankruptcy in Scotland.

Once you're bankrupt, then the Accountant in Bankruptcy - who is trustee/OR for all LILA cases - can treat your case exactly the same as any other bankruptcy.

Most people who go bankrupt under LILA probably won't get an IPA, but it can happen.

They can also get a BRO/BRU if the AiB's investigations suggest that this is appropriate.

Katief07

yes quite correct of course it is a form of bankruptcy, i did not mean to be misleading at all, i really was meaning pretty much what you have stated sorry for any confussion

Janey51

Oh thank you so much.
I have thought so much about what happened to the money but I do know that the sudden death of my husband on top of other personal events totally floored me and I did things which are so out of character for me.
I know I gave money to a niece who I did not know was heavily into drugs because I felt sorry for her.
Twice I booked holidays and cancelled at the last minute because I was convinced my husband was going to come back and I would not be there. I lost the cost of both holidays. Grief is a terrible thing.
So I phoned the local CAB and have an appt on Monday to speak to someone from the Money Advice Service and then I will be given an appt with a Money Advisor 2 weeks later who will help me go through the forms to fill in for LILA.
If I can, I will start a thread to say what happens to me which may add to help for other people on MSE

Thank you again.

Katief07

thats good you have managed to get an appointment with CAB so quick I am sure you will come away feeling much better about the whole thing. Good Luck with everything x