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Debtors in Scotland `could receive help`

18/06/2007

People with high levels of debt in Scotland could benefit from a new escape clause from the Scottish Enterprise, it has emerged.

Current law states that a debtor can petition for their own bankruptcy if their debts total at least £1,500, if they are not able to repay what they owe and if they have been taken to court.

However, those who have not been taken to court because lenders know they will not be able to pay are barred from choosing this option, the Scotsman reports.

A new category called low income, low assets (LILA) - those with a weekly grow income of less than £100, who do not own their own home and whose assets are less than £1,000 - has been created by the Executive to allow those who qualify to also declare bankruptcy.

Susan McPhee, head of social policy and public affairs at Citizens Advice Scotland, told the publication: "For those absolutely mired in debt, bankruptcy probably is their only realistic option forward.

"It would, at least, allow them a chance to rebuild their lives afterwards."

The Scottish Executive was formed in 1999.

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