Debtor applications are no longer made to the court but to the AIB, making such applications almost an administrative process. In addition all personal sequestration actions must be made to a sheriff. This should make little difference although some creditors did use the Court of Session for sequestration applications but that route is no longer competent.
The £1500.00 limit for debtor applications remains. Creditors, however must have debts exceeding £3000.00 before they can present a petition for sequestration. The limit for service of a statutory demand is also increased but in this instance to £1500.00.
Low Income/Low Asset Applications (LILA)
The increase in the creditor limit may well lead to a decrease in creditor applications. What may lead to a significant increase in debtor applications are applications by low income low asset debtors or LILA applications as they have become known. It was originally envisaged when the Bill was published that these applications could be made by debtors with income below £100.00 per week and assets of less than £1000.00. The regulations that came into force on commencement of the ACt provided that the income was to be less than the minmum wage and assets less than £10,000.00. In addition benefits are disregarded in calculating income. As with all debtor applications these will be dealt with administratively by the AIB. It is anticipated that these provisions will lead to a substantial increase in personal bankruptcies.
The following links will take you to the relevant legislation.