The Minimal Asset Process (MAP) is a popular route into bankruptcy for people with unaffordable debts in Scotland.
This debt relief solution was introduced by the Scottish Government to help individuals with little or no assets to clear their debts and start afresh.
MAP is a simplified, low-cost, and fast-track bankruptcy process that aims to help those with low income and few assets, who would otherwise find it difficult to pay off their debts. In this article, we will cover everything you need to know about the MAP, including its eligibility criteria, advantages, and limitations.
What is the Minimal Asset Process (MAP)?
The Minimal Asset Process (MAP) is a simplified form of bankruptcy that is available in Scotland.
It is designed for people who have low income, few assets, and who are unable to repay their debts.
MAP is a route into bankruptcy that is intended to help individuals clear their unaffordable debts and get a fresh start.
MAP is a low-cost and fast-track bankruptcy process that typically lasts for six months. It is a debt relief solution that can provide much-needed relief for people who are struggling with unaffordable debts.
Who is eligible for the Minimal Assets Process?
The Minimal Asset Process is a common financial tool for individuals with low income and few assets who are struggling with debt.
To be eligible, you must meet certain criteria.
Eligibility criteria
Firstly, you must be a resident of Scotland or have been carrying on business in Scotland in the year prior to the application.
Secondly, you must have a low income and few assets, such as savings or property. Your debts must also be unaffordable, meaning you cannot make the required payments to your creditors.
Additionally, you must not have been made bankrupt or been subject to a MAP in the past five years.
Qualifying benefits
To qualify for MAP, you must also be receiving income-related benefits, such as Universal Credit, Income Support, or Jobseeker’s Allowance.
Your disposable income, or surplus income, which is the amount of money you have left after paying essential living expenses, must be too low to allow you to make a regular payment towards your debts.
If you meet these eligibility criteria, you may be able to apply for MAP and benefit from this simplified, low-cost route into bankruptcy.
What kind of debts can MAP bankruptcy help me with?
Most unsecured debts can be included in a MAP bankruptcy. Unsecured debts are debts that are not secured against any property, with common examples being credit card debts, personal loans, or overdrafts.
MAP can help you clear your unsecured debts if you are struggling to make the required payments. However, it’s important to note that MAP won’t help with debts like student loans or court fines, as these are considered priority debts and must be repaid in full.
If you have secured debts, such as a mortgage or car loan, you may still be eligible for MAP, but you will need to keep making the required payments.
How long does a MAP last?
Minimal Asset Process bankruptcy typically lasts for six months from the date of award, after which the individual will be discharged from their debts, subject to certain conditions.
During the six months, the individual must make contributions from their disposable income to pay towards their debts. Disposable income is the amount of money left over after paying essential living costs, such as rent/mortgage, food, utilities, and council tax.
Once the six-month period is over, the individual will be discharged from their debts, meaning they will no longer be liable to pay them. However, it’s worth noting that MAP can have an impact on your credit rating, and there will be certain credit restrictions in place for six years after discharge.
MAP advantages and disadvantages
We’ve laid out the pros and cons of the Minimal Asset Process so you can make a more informed choice:
Advantages of a Minimal Asset Process (MAP)
- Quick resolution with debt discharged in around six months.
- Low-cost option suitable for individuals with limited assets and income.
- Offers relief for those struggling to repay unaffordable debts.
- Application involves professional advice from an approved money adviser.
- Suitable for individuals receiving specific income-related benefits in Scotland.
Disadvantages of a Minimal Asset Process (MAP)
- Impact on credit rating for six years can limit future borrowing.
- Not suitable for individuals with secured debts like mortgages.
- Student loans and court fines remain payable, not included in MAP.
- Limited eligibility criteria; excludes those previously declared bankrupt or under MAP.
- May affect ability to open a bank account and rent property.
MAP application process
The application process for the Minimal Asset Process (MAP) involves several steps. Here is how it generally works:
Get advice on debt solutions
If you are struggling with unaffordable debts, the first step is to seek advice from a debt advice agency or a licensed insolvency practitioner. They can help you understand the different debt relief options available and whether MAP is suitable for your circumstances.
Reach out to an approved money adviser
To apply for MAP, you need to get advice from an approved money adviser (AMA) who is authorised by the Scottish Government. The AMA will review your financial situation and advise you on whether MAP is the right option for you.
Apply to the Accountant in Bankruptcy (AiB)
If you decide to proceed with MAP, your AMA will help you complete the application form and submit it to the Accountant in Bankruptcy (AiB), the Scottish Government agency responsible for administering MAP. The application must be accompanied by a fee of £90.
Discharge from Minimal Asset Process (MAP)
If your application is approved, you will be discharged from MAP after six months, subject to certain conditions. This means that your unsecured debts will be written off, and you will be free from most of your financial obligations.
Post-MAP credit restrictions
It’s worth noting that MAP may have an impact on your credit rating, and there will be certain credit restrictions in place for six years after discharge. During this time, you may find it difficult to obtain credit or loans, and your ability to rent a property or reach a tenancy agreement may also be affected.
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How does the MAP impact your credit rating?
The Minimal Asset Process (MAP) can have a significant impact on your credit rating. Minimal Asset Process sequestration, like any form of insolvency, will be recorded on your credit file for six years from the date of discharge.
During this time, lenders and creditors will be able to see that you have been through a debt relief solution, which may make it harder for you to borrow money or access credit. It may also affect your ability to open a bank account, as some banks may be reluctant to offer accounts to people who have been through bankruptcy.
While you are going through MAP, your credit rating will likely be negatively affected, as you will not be making payments to your creditors. However, once you have been discharged from MAP, you can start to rebuild your credit rating by making payments on time and managing your finances responsibly.
Where can I get help to deal with my unsecured debts?
If you find yourself in a difficult financial situation and owe money that you cannot afford to repay, it’s crucial to conduct further research and seek debt advice before making your next move.
At Talk About Debt, we are a leading debt solution provider in the UK, and offer a range of services, including guidance on formal debt solutions available in the UK. Our experienced advisors will be happy to help you make an informed decision about your financial future.
If you want to learn more about how we can support you in managing your debts, reach out to one of our advisors today.
