DEBT SOLUTIONS

What is the Minimal Asset Process (MAP)?

DEBT SOLUTIONS

What is the Minimal Asset Process (MAP)?

What is a Minimal Asset Process (MAP)?

The Minimal Asset Process Bankruptcy, more commonly known as a MAP, is a relatively new route into bankruptcy that allows people to have a fresh start financially.

Introduced by the Government, a MAP is designed for Scottish residents with low income and little to no assets, and allows them to go into bankruptcy and write off their debts after a period of six months.

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How does the Minimal Asset Process (MAP) work?

In order to qualify for a MAP you must be a non-homeowner and have either been in receipt of benefits for six months or have no disposable income. You can only apply for a MAP through an approved Money Adviser and your debt level cannot exceed £17,000.

Your income and expenditure will be assessed using the Common Financial Tool to determine your ability to repay your debts over a sustained period of time. There is an application fee of £90 which is payable to the Accountant in Bankruptcy (AiB), who will act as your Trustee.

Once you have been discharged from the MAP, you will be subject to certain restrictions in terms of accessing credit and business transactions for a further six months. Your Trustee will also remain in office during this time to finalise your bankruptcy.

What kind of debts can be included in a Minimal Asset Process?

Most debts are able to be included in a MAP, including:

  • Bank loans
  • Overdrafts
  • Credit cards
  • Catalogues/store cards
  • Payday loans
  • Utility bills

Debts such as court fines, student loans or child maintenance cannot be included. This also goes for any secured or fraudulent debts you may have.

How do I apply for the Minimal Asset Process?

Step 1: Contact an approved money adviser

The first step you have to take is to contact an approved Money Adviser. They will assess your situation, using the Common Financial Tool to work out your income and expenditure. If they deem that you have no disposable income and are unable to pay your debts, they will begin the process.

You can check if a MAP is the right solution for you by using our Debt Assistant. This will give you an indication of the minimum monthly payments for the different debt solutions that are available to you.

Step 2: Apply to the Accountant in Bankruptcy

If you decide that a MAP is the solution best suited to you, your Money Adviser will award you a certificate as confirmation of your agreement, much the same as a Sequestration.

An application will then be submitted to the AiB within 30 days. You will also be required to pay the £90 application fee at this stage. The Trustee will notify all your creditors of your MAP and you will no longer be required to make any payments to your debts.

It is important to note that MAP is a form of bankruptcy, so any assets you do have may still be taken and sold to pay off some of your debt.

Step 3: Discharge after six months

Once your MAP has been awarded, you will be automatically discharged from it after six months.

You will no longer be in debt after this period, but it will have an adverse effect on your credit rating for a minimum of six years and you will find it difficult to borrow money during that time.

Step 4: Post-MAP credit restrictions

You will also be put under certain credit restrictions for six months after your discharge.

If you’re applying for credit, you will not be able to borrow more than £2,000 and you must make the lender aware that you have been subject to a MAP. If you’re self-employed, you will find it difficult to trade and you must make anyone you do business with aware that you have been bankrupt.

It’s also important to note that if you are to obtain any new assets within four years after your MAP, your Trustee will be able to sell them to pay back your debts.

Advantages of the Minimal Asset Process

  • It gives you relief from your debts
  • It’s an option suitable for those on benefits
  • It’s a suitable option for those who have little to no assets
  • It can be good for those who have low income and cannot afford to make payments to their debts
  • You will be debt free after six months

Disadvantages of the Minimal Asset Process

  • It will have an adverse effect on your credit rating
  • Your future ability to obtain credit will be deeply impacted
  • Details can be posted on the Insolvency register and will remain there for up to one year after your Trustee is discharged
  • Any assets you do have may be sold to repay you debts
  • You will face credit restrictions for six months after being discharged

How long does the Minimal Asset Process last?

One of the key advantages of the Minimal Asset Process is how quickly it can be completed. All being well, you will be discharged from your MAP after six months, which is half the time it takes to be formally discharged from a bankruptcy.

You won’t be required to make a monthly payment during those six months, and once you’re discharged your debts will legally be written off, with your MAP acting as a full and final settlement of your debts.

What is the difference between a MAP/Sequestration?

The Minimal Asset Process and sequestration are two different routes to bankruptcy in Scotland. The main differences between the MAP and sequestration are affordability and term length.

Because the MAP is specifically designed for low-income people, it costs less than sequestration. The set-up fee for a MAP is £90, whereas it costs £150 to apply for sequestration (bankruptcy) in Scotland.

A MAP also takes less time than sequestration. Provided you stick to the terms of the agreement, you will be discharged from a MAP in 6 months, with no obligation to repay remaining debts. Bankruptcy, on the other hand, lasts an initial 12 months, and you will still be under restrictions beyond that time.

Why use Carrington Dean for a MAP?

No one should lose sleep at night worry about their debts, but that’s easier said than done.

Here at Carrington Dean we want to give you the fresh financial start you deserve. As Scotland’s leading debt specialists, we put your needs at the heart of the decision-making process and use our extensive experience to help you find the debt solution that works for you.

All our advice is free, confidential, and impartial. Our experts a trained to guide you through the process and the final decision is always yours to make. Contact us today on 0808 253 8553.

Frequently Asked Questions

Once you have been awarded your MAP, all creditors included are unable to contact you. They are also no longer able to take any legal action against you.

Generally, a MAP will last for six months, after which your debts will be written off. However, this can be extended should your circumstances change within that time.

Depending on your circumstances, a MAP can also affect your life in other ways.

It can affect your current tenancy if you include rent arrears in your MAP. Landlords may decide to evict you in these instances, and you may find it difficult to obtain a new tenancy agreement.

Your bank is also likely to either freeze your account or close it don completely, so it’s always best to try and open a fresh basic account to use once your MAP has been awarded.

A MAP may affect your employment depending on your vocation and contract. If you are unsure, check with your HR department, who will be able to go through your contract with you and advise whether it will have an effect on your job.

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