Fixture Savings » Bankruptcy http://www.fixturesavings.com Economic and Finance Blog Tue, 10 Jan 2012 14:05:43 +0000 en hourly 1 http://wordpress.org/?v=3.0.4 An alternative way to go bankrupt for Scottish residents http://www.fixturesavings.com/an-alternative-way-to-go-bankrupt-for-scottish-residents http://www.fixturesavings.com/an-alternative-way-to-go-bankrupt-for-scottish-residents#comments Tue, 10 Jan 2012 14:05:43 +0000 admin http://www.fixturesavings.com/an-alternative-way-to-go-bankrupt-for-scottish-residents If you are a low income earner and you don’t have many valuable assets, and you have serious debt problems, the LILA scheme is designed to help you to go bankrupt.

The LILA scheme is only available for residents of Scotland. LILA stands for Low Income Low Assets because it is a route into bankruptcy for people who earn below the national minimum wage for a 40-hour working week (currently £237.20) and have assets worth less than £10,000 in total.

Once the bankruptcy order is made, the process is the same as a standard bankruptcy.

In Scotland, you can only go bankrupt by normal means if your lenders have started taking legal action to recover your debts. You can apply for bankruptcy through the LILA scheme even if they haven’t.

 

What are the benefits of the LILA scheme?

If you have spoken to a debt adviser and they recommended bankruptcy, it could help you in the following ways:

 

  • You can write off the part of your unsecured debt that you can no longer afford.
  • You are protected from legal action from your lenders.
  • You won’t deal with your lenders directly anymore.
  • It could be over in 12 months (the usual time it takes to become discharged from bankruptcy).

What are the disadvantages of the LILA scheme?

 

  • You cannot apply for the Low Income Low Asset route to bankruptcy if you’re a homeowner or your asset value or income is above a certain threshold. You can learn more about the income and asset threshold for the LILA scheme here.
  • Your credit rating would be greatly impacted by bankruptcy, making it very difficult to borrow money for at least six years.
]]> http://www.fixturesavings.com/an-alternative-way-to-go-bankrupt-for-scottish-residents/feed 0 Bankruptcy: Chapter 13 http://www.fixturesavings.com/bankruptcy-chapter-13 http://www.fixturesavings.com/bankruptcy-chapter-13#comments Tue, 27 Oct 2009 10:27:22 +0000 admin http://www.fixturesavings.com/?p=78 concept of bankruptcyChapter 13 bankruptcy – or the “wage earner’s plan”, was set up to allow an individual with a regular income to make up a plan to repay his/her debts, in monthly installments. Even if this sounds like a good plan, it’s best if you look at it as a last resort. There are ways to avoid chapter 13 bankruptcy by carefully managing your debt and seeking professional help.

The best solution out there for you is to find a debt counseling agency. A non-profit organization with a clear privacy policy and a wide range of services is what you should be looking for. Look around until you find one that suits your needs. They will analyze your debt situation and come up with a one-payment plan where you pay all your debts in one monthly installment, instead of writing many different checks to different collectors.

But that’s not all. Most debt counseling agencies have negotiators who will contact your creditors directly and attempt to reduce your interest rates and organize better payment plans which will save you money in the long term. Creditors will have no problem with this – they’d rather see money coming in monthly than having to pursue legal action to get you to repay them.

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