What is a Minimal Asset Process (MAP)

*Please note this solution is only available to Scottish residents

A minimal asset process (MAP) is a type of bankruptcy available to help those struggling to write off debt they can’t afford to pay back in a reasonable timeframe.

This solution is designed for those who have a low income and very little assets. It’s also more straightforward and cheaper than Sequestration (bankruptcy in Scotland).

Applications for a Minimal Asset Process can only be made through an approved money adviser. It normally lasts for six months and you don’t need to make any regular payments.

Do I qualify for a Minimal Asset Process (MAP)

Not everyone will be able to apply for a Minimal Asset Process as there is a criteria that needs to be met. You must:

• Have a debt level between £1,500 and £17,000
• Live in Scotland (or have lived there within the past year)
• Not be a homeowner
• Have assets that have a total worth of less than £2,000 (with no one item worth more than £1,000)
• Own a car worth more than £3,000
• Not have been through sequestration within the five years before your application
• Have low income that leaves you with no money left over after you have covered your essential living costs
• Have an income made up solely of benefits that are income-based (such as jobseekers/employment support allowance)

If you don’t meet these conditions, then you won’t qualify for a Minimal Asset Process and will have to look for alternative options to deal with your debts.

How much does a Minimal Asset Process (MAP) cost?

There is a fee of £90 when you apply for a Minimal Asset Process. This is payable to the Accountant in Bankruptcy (AiB) and must be paid in order to submit your application.

Some companies may also charge you set up fees, but there are plenty out there who help you through your application for free.

How do I apply for a MAP?

The application process is pretty simple, but you cannot do it yourself. All applications for a Minimal Asset Process need to be done through an approved money adviser or debt advice service:

1. They will calculate your income and expenditure using the Common Financial Tool, which will also work out whether you could pay your debts back in a reasonable amount of time or not.
2. You’ll then need to pay the £90 fee so that your application can be submitted (usually within 30 days)
3. Your Trustee will then let all of your lenders know that you have entered into a Minimal Asset Process and you can stop making payments towards your debts
4. Once your Minimal Asset Process has been approved, you’ll automatically be discharged from it after six months and your debts will be written off. You’ll also be put under a set of restrictions at this stage, which will last for a further six months

*Please note, if you acquire any new assets during the first four years after being discharged from your Minimal Asset Process, then the Trustee is able to take them to be sold for funds to pay back your debts.

What debts can be included in a Minimal Asset Process?

You can include most debts in a Minimal Asset Process, such as:

• Credit cards
• Overdrafts
• Loans (payday/bank)
• Catalogues
• Utility bills

However, you will not be able to include debts such as student loans, child maintenance and court fines as well as any secured debts or one found to be fraudulent.

What are the advantages of a Minimal Asset Process?

• It only costs £90 to apply, which is much cheaper thank sequestration (you pay this to the Accountant in Bankruptcy)
• You can include the majority of unsecured debts
• Once it has been approved, the people you owe money to can no longer dd any interest, chase you for payment or take you to court
• It’s a legally binding formal solution (and you don’t even have to appear in court)
• You’re discharged from your Minimal Asset Process after six months
• After you’ve been discharged, the debts included will be written off

What are the disadvantages of a Minimal Asset Process?

• It can affect your job depending on the industry you work in
• For those who are self-employed, you will find trading and getting credit for trade etc. much more difficult
• If you rent privately, then you may be evicted or be refused when it comes to a tenancy renewal
• You cannot include your student loans, court fines or any current child maintenance payments
• The bank is likely to freeze your accounts and/or downgrade you to a basic account
• It will affect your credit score for six years from the date of approval

If you are unsure that a Minimal Asset Process is the best solution for you, then it’s best to speak to a qualified debt adviser for more information.

How long does a MAP last?

A Minimal Asset Process will usually last for six months, after which you will be discharged, and your debts written off.

However, you will be put under restrictions during this time that will extend for a further six months after this point – which will limit your credit and borrowing abilities. If you don’t stick to these restrictions, it will be considered a criminal offence and you will be hit with a hefty fine and potential prison time.

Will a MAP affect my credit rating?

Like with all forms of insolvency, a Minimal Asset Process will affect your credit score. It will be noted on your file from the day it is approved for a total of six years.

This will mean that you will find it difficult to obtain any credit during this time, even though you are discharged after six months. The restrictions you are put under will also add to this as you will need to notify any lenders that you have been subject to the Minimal Asset Process.

Are there other things a MAP affects?

Unfortunately, it’s not just your credit score that’s affected by a Minimal Asset Process; it can affect many other aspects of your life, such as:

• Your living arrangements

Depending on your situation, some people who rent privately can be evicted. This commonly happens to those who are behind on their rent because the debt is included in the Minimal Asset Process.

You may also find that you will be refused when it comes time to renew your lease or apply for a new one elsewhere.

• Your bank account

Since a Minimal Asset Process is a form of bankruptcy, it will affect your bank account, especially if you owe money to the bank itself.

The bank react in one of two ways; if you owe money to the bank, they will freeze your account(s) and you will need to find a new bank to work with. In these instances, you will only be able a basic account and won’t be allowed any credit facilities.

If you don’t owe money to the bank, they may still freeze the account, but it’s also likely that they will downgrade your account to a basic one.

• Your work

If you’re thinking of applying for a Minimal Asset Process, it’s important to check your employment contract for any mentions of bankruptcy or insolvency. This is because in some industries or jobs, it can affect your job.

If you are unsure, then we advise to contact your HR department to find out if a Minimal Asset Process will have an impact on your employment.

• Self-employment

For those who are self-employed, you will find it harder to trade once you are in a Minimal Asset Process. This will be especially difficult if you use credit to help pay for stock or services.

You’ll also have to make everyone you trade with aware that you are in a Minimal Asset Process, which may cause you to lose some business.

As such, it’s important to take all these things into account before making the decision to apply for a Minimal Asset Process to make sure it’s the right solution for your circumstances.

If you need more information or advice on the options for dealing with your debts, we’re here to help. Just click below to be connected to one of our expert advisers.