What is the Minimal Asset Process?

If you’re struggling to get out of debt and have few assets, the Minimal Asset Process could be a cheaper, quicker way to become debt free than applying for sequestration (bankruptcy in Scotland). 

Until 2009, if you lived in Scotland and had debts you couldn’t afford to pay, you were effectively trapped with that debt until your creditors decided to force you into bankruptcy. You couldn’t take matters into your own hands. Since then things have changed, and in 2015 the Minimal Asset Process (MAP) scheme was introduced.

It gave you the opportunity to get out of debt in just six months, for a standard cost of just £90.

Do I Qualify For A MAP?

To apply for a MAP, you’ll need to satisfy the following criteria:

• You must live in Scotland but not own your own home
• You must have debts of £1,500 or more, but the debt should not exceed £17,000
• You must have assets (i.e. things you own that you could convert into cash) worth no more than £2,000, and no single asset must be worth more than £1,000 (but see * below)
• *The one exception to the above rule is a car, which must be worth no more than £3,000
• You must not have been awarded sequestration (bankruptcy) in the past five years
• You must not own any land
• You must not have any disposable income that could be used to pay your debts (so either you must show that your income is made up only of income-related benefits, or you must show that the money you earn is only sufficient to cover your essential living expenses, with nothing left over)
• The MAP application process must be carried out by a recognised Insolvency Practioner

The Benefits Of The Minimal Asset Process

The key advantage of the MAP debt arrangement scheme is that, after six months, you will be discharged from all debts covered by the MAP. They will be legally written off, with the MAP acting as full and final settlement of your debt.

Other benefits of a MAP include:

• You choose when to apply for the MAP. You don’t have to wait for your creditors to force you into bankruptcy
• You don’t need to appear in court
• Interest or other charges stop being added to your debt once the MAP is approved
• You don’t have to negotiate with creditors
• You don’t have to deal with bailiffs and debt collectors
• Your creditors can no longer demand payment once the MAP is approved (so the red ‘final demand’-type letters that can be so stressful should cease once your debt management solution is in place)

Potential Risks Of The Minimal Asset Process

Entering into a MAP is a serious decision and not something to be done lightly. Here’s why:

• Your credit rating will be affected for six years from the date of approval of your MAP. That means you may not be able to get credit (or may not be able to get credit at preferential interest rates) during that time
• Your bank account may be frozen or closed. You may find it difficult to open another bank account
• Your name will appear on the public Register of Insolvencies
• Some employers and landlords have strict rules about bankruptcy. If you apply for a MAP and your employer or landlord has such bankruptcy conditions in your contract you may lose your job or your home
• If you work for yourself as a sole trader, you may find it difficult to get the credit you need to trade

Can All My Debts Be Included In A MAP?

Most of them, but you won’t be able to use a MAP to clear student loans, court fines or child maintenance arrears.

How Do I Apply For A MAP?

You can’t apply for a MAP debt management solution on your own. You need to do it through a professional debt or financial advisory service such as Scottish Trust Deed’s debt solution experts.

Once you call us, we’ll work with you to ensure a MAP is the right debt management choice for you and work through the criteria to ensure you qualify. The only fee you’ll need to pay is a standard application fee of £90 (which is payable whoever you submit your MAP application with).

If you’re ready to get out of debt in just six months, talk to a debt advisor today.