Has anyone got experience of a LILA?

[30SecondsToVenus]

I am in Scotland and one way to go bankrupt is through a LILA (low income low asset)

From what I can gather, it costs £200 and you are effectively bankrupt after that, with absolutely nothing to pay to creditors.

I have struggled and ignored debt for about 7 years now. Every day I get letters, phone calls and emails threatening all sorts of court action and legal proceedings. So far no action has actually been taken. It's starting to upset and scare me.

I owe about £12,000. This is to phone networks, the bank of Scotland, several payday loan companies, provident catalogues, council tax and a credit card. I'm not sure exactly who I owe because it's been passed from company to company over the years.

I am fully aware that I should have paid it back but I just didn't. I was completely irresponsible (most credit obtained aged 18-23, I'm 25 now) and just saw it as free money.

It's got to the stage now where I just can't pay it back. I'm a single parent on a very low income and I can't even afford a debt management plan. I'm very annoyed with myself for getting into this situation and I will never ever do it again.

I haven't got a hope in hell of getting a mortgage or any other form of credit. This is why I'm considering a LILA. After 6/7 years your credit history wiped and you start again from scratch - at least this is what I'm led to believe.

A couple of questions - I still have a phone contract, will I need to get rid of this too? Will it be wiped along with everything else because it is actually a form of credit?

Also, will I need to close all bank accounts? I'm not sure if I'll be allowed a bank account when I'm bankrupt.

Any advice would be great, it's incredibly difficult to get a citizens advice appointment in this area although I will call and make an appointment

I can't give you advice, not least because I don't live in Scotland. However, you are right to make an appointment with the CAB. Or maybe pop down to their offices and see if they have any leaflets which may point you in the direction of other agencies who can help you.

Good for you for facing this head on before the situation gets worse. Making an appointment with the CAB and following their advice will be the best thing you ever do. Good luck!!

Hi there - it must be horrible for you!

Free phone number to call - even from a mobile - is StepChange on 0800 138 1111. They may help while waiting for an appointment with Debt Adviser at CAB face to face. They know how it all works in Scotland.

It might be good to talk through things first, in order for you to take relevant debt letters, bank account numbers, etc. Hope you'll get some solid advice.

This is a horrible situation. I'm sure you were in some way encouraged by these companies to get into debt and they would have known your age. Stick with the promise to yourself 'never again', but forgive yourself. You are definitely not alone in getting into this situation.

From what I gather LILA is a very serious way to sort this and needs to be considered carefully I would, as the others say get lots of advice.

Presumably you've seen this site? www.debthelpscotland.co.uk/debt-advice/lila-low-income-low-assets/

Also: National Debtline
The National Debtline can give free information to people with debt problems. The National Debtline telephone number is 0808 808 4000. There is also a website at: www.nationaldebtline.co.uk/scotland.

Most definitely talk to CAB.

Good luck and take care.

Thank you so much for the replies, I have got a cab appointment in a couple of weeks and will discuss my options when I'm there.

It's going to be tough but I genuinely believe it's the way forward. I will never get into this situation again

It sounds like a debt relief order.
I have a couple of friends who have done them and they say it was the best thing they ever did.
The downsides are they cannot get credit anymore for anything. It does affect your housing as you would need a creditor/guarantor for a rental. You can't get a mortgage for the 7 years but I believe after that you are treated as normal credit risk
The best thing for one friend was as soon as she told them it was a dro and cab were involved they stopped hounding her, in fact I think they have to stop by law.

If you feel you can trust yourself around credit in the future it is a good idea. Beware though as a friend of a friend has had 2 now and the 2nd time it was at least 3 times as much as the 1st