Scottish Bankruptcy Law
Under the Scottish bankruptcy law, you need to find £200 to make an application to the Court and this is seen as a major hurdle for a debtor who is already fighting it hard to find the ways and means to clear his/her debt. However, in the rest of U.K. the application fee under similar circumstances is closer to £700. Scottish residents can also benefit from LILA or the Low Income Low Asset debt relief scheme in place of making a bankruptcy application. Remember though that fee is payable even when you file an application under LILA. In instances where your money advisor is convinced, you may seek to pay the fee in instalments. Under Scottish law, sequestration and bankruptcy are identical.
Amendments to the Law
The Scottish law makers are working towards making the provisions under bankruptcy law more equitable to debtors as well as creditors. While some of these amendments have already taken effect, some more are in the pipeline. Except addressing the working process no material changes are currently contemplated under the proposed amendments.
Your Last Resort
Bankruptcy is the very last resort that you have to get out of debt and comes with a series of challenges to your financial standing and credit worthiness. That said when you apply for bankruptcy the court must accept the application after due process and declare you a bankrupt for the provisions to get under way. The whole process usually takes up to one year to complete. Upon completion of the process you are freed from all debts covered under the agreement.
Once declared as bankrupt, the immediate consequence is that all your assets including your car and home will be conveyed to the trustee under the bankruptcy act and these assets will be sold off to recover some money and pay off the creditors. However, you may be discharged from the bankruptcy at the end of one year subject to your past conduct. If you continue to be a wage earner or have regular income, you may be directed to make monthly payments to pay for your debts up to 3 years. Your income and living expenses will be considered for this purpose and a disposable income arrived at.
Public records will reflect your bankruptcy and this can adversely your employment opportunities as well as ability to raise fresh credit. Your credit score will be compromised and there are related problems on that front too. Again, if you borrow more than £250, you are legally obliged to inform the lender of your insolvency. Failure to do so will attract criminal action including imprisonment. You may not be able to take up certain types of employment such as a company director. The bankruptcy will stay on your credit report for 6 years.
Give It A Try
Before considering a bankruptcy application you should explore every option available to you and consult debt experts using the internet to find one nearest to you. This way, you stand a lean chance of wading your way through the muddle and perhaps avoid a bankruptcy altogether.