What is the Minimal Asset Process (MAP)?
The Minimal Asset Process (MAP) is a form of bankruptcy designed for those who have a low income and next to no assets as a way to write of debts they can’t afford. It’s available only to those living in Scotland and is often used as a way to enter Sequestration.
A strict criterion needs to be met to enter into a MAP. Your overall debt level cannot be more than £17,000 and any assets you own cannot be worth more than £2,000 overall. If you own a car, this cannot be worth over £3,000.
Aimed at non-homeowners, it costs £90 to set up and will usually last a total of six months. Payments to your lenders will be stopped and, as long as your situation doesn’t change within the MAP period, you will be discharged. Any remaining debt will then be written off.
Do I qualify for a MAP?
As mentioned above, to be able to apply for a MAP you must meet a strict set of conditions. You must:
- Not be a homeowner
- Have little to no spare income after your essential outgoings have been paid
- Not own assets valued at more than £2,000 overall
- Have a debt level between £1,500 and £17,000
- Own a car that’s worth less then £3,000
- Have been in receipt of certain benefits for at least six months
*It’s important to remember that this is a solution only for those living in Scotland. If you live in England, Wales or Northern Ireland, you will need to look at other solutions such as an IVA, debt management plan or debt relief order.
MAP advantages and disadvantages
Like all debt solutions, a MAP comes with good points and bad points, which we have listed below for you.
- You will only be required to pay the £90 application fee
- As long as your situation doesn’t change, you are discharged after six months
- Interest and charges are stopped on the debts included
- Your debts will be written off after discharge
- The majority of unsecured debts can be included
- You will be protected from any further action from your lenders
- Although it is legally binding, you won’t need to appear at court
- It will have a severe impact on your credit rating for six years
- You cannot include certain debts such as student loans, current child maintenance payments or court fines
- You aren’t able to apply for any credit until six months after being discharged, it will also be very difficult to get approved
- The bank will likely freeze or close down your account and only allow you to take out a basic account
- Your job can be affected depending on your job or terms in your contract
The MAP process
Applying for a MAP can seem quite complicated, so we’ve laid out the process step by step below for you to help:
You cannot apply for a MAP on your own – it needs to be done through a licensed money advisor. They will use the Common Financial Tool to find out if you qualify for the solution, how much spare income you have after your essential outgoings and if it is the right solution for you.
If it is decided that this is the route you should take to deal with your debts, then the money adviser will go ahead and begin your application. You will need to pay the £90 fee at this stage, and this will be sent to the Accountant in Bankruptcy (AiB) along with your paperwork.
You should then be given a certificate that will act as confirmation of your MAP. A Trustee will be appointed to your arrangement and it will be their responsibility to notify all your lenders at this stage.
It’s important to remember that this is a form of bankruptcy. Any items you do have that are considered to be assets can still be taken to be sold to pay your debts.
Once your MAP has been granted, you no longer need to make any payments towards your debts.
As long as your situation doesn’t change, you will then be discharged from this after six months. Your debts will then be written off and you will no longer owe money to any of the lenders included.
This will have a severe impact on your credit rating for a total of six years, which will make applying for any credit during this time very hard.
You may think that after you have been discharged, you are free to start again completely. However, you will be given a set of limitations that you will have to stick to for six months after this time.
If you decide to apply for any new credit, you won’t be able to borrow more than £2,000. You’ll also have to make the company aware that you have been in a MAP before applying.
For those who are self-employed, trading will become harder and you’ll have to make anyone you do business with aware of your MAP. And if you end up with any new assets, these can still be taken to be sold to pay back your debts.