What is a Minimal Asset Process? (MAP)

A Minimal Asset Process is a form of Sequestration (bankruptcy) for residents of Scotland with no assets or surplus income to realistically repay their debts and ultimately become debt free. A Minimal Asset Process lasts for six months, at the end of which, if your financial situation is unchanged, your debts are officially written off.

Is a Minimal Asset Process right for me?

A MAP is a scheme designed for people who possess little, or no, assets, without surplus income to pay back their debts. People applying for a MAP typically shouldn’t own property, own a car or have assets worth over £2000 and have a disposable income (after household bills and other essentials are factored in) of £75, or less, per month. Your outstanding debts must total less than £25,000.

A MAP can be seen as an alternative to Sequestration. Once entered, all interest and charges from your creditors are frozen over a 6-month period. By the end of your MAP, your financial situation will be reviewed, if your finances have improved you will be expected to begin making repayments towards your debts. If your situation hasn’t improved, your debts will be written off.

When should I consider a Minimal Asset Process?

If you have debts up to £25,000 that you feel you can’t pay back and have little to no assets or property of your own to contribute towards repayments, a MAP may be a preferable choice to Sequestration.

A MAP may be a good option to consider if you feel you have no reasonable means to repay your outstanding debts.

How do I apply for a Minimal Asset Process?

1. Before applying you’ll need to seek advice from an approved financial advice company, an application for a MAP cannot be made without this initial consultation. You’ll need to review your financial situation, who you owe money to, details of your debts, cost of living and expenses. The sooner you give this information the sooner your application can begin.
2. Applying for a MAP will require an initial nominal fee of £50 to be paid to the Accountant in Bankruptcy. This payment can be made in increments; however, it will need to be paid in full for your application to progress. However, this can be reduced to £0 based on certain financial criteria.
3. Once you have entered your MAP, you will have a 6-month period free from your current debts. During this time, all interest and charges are frozen and your creditors will be unable to contact you. At the end of the 6-month period, your financial situation will again be reviewed, if your situation is unchanged your debts will be written off. If your finances have improved over the MAP, you will be expected to begin repaying your debts.

What debts are covered by a Minimal Asset Process?

Almost all debts are covered under a debt relief order, these include:

• Credit card
• Overdraft
• Overdue utility bills  
• Rent arrears
• Personal loan
• Benefits overpayments
• Council tax
• Telephone and broadband bills

Am I eligible for a Minimal Asset Process?

As a Minimal Asset Process is a scheme designed to help people with little chance of repaying their debts, you will need to meet set qualifying criteria to apply. These include:

• Having debts up to £25,000
• Not owning property
• Not owning a vehicle worth more than £3000
• Without any assets worth more than £2000
• Less than £75 a month in disposable income each month
• Being a resident of Scotland
• Not owning property or land
• Unable to repay your debts
• Not having been on a MAP in the last six years
• Not currently on any formal insolvency solution (IVA, Sequestration)

Living with a Minimal Asset Process

Once on a MAP, you will be given breathing room from your debts and creditors. A MAP gives you a 6 month period to get ahead of your debts, either giving you the opportunity to improve your financial situation or to be free from your unpayable debts.

However, like most debt solutions, a MAP will have implications for your ability to take out future loans and your credit score. As your credit score will be negatively affected for six years after the start of your MAP.  Though it is worth considering this negative score could be less so than numerous debts and arrears actions that could have been taken against you otherwise.

It will be difficult to receive more credit during your MAP, as your disposable income is confirmed as less than £75, so you probably wouldn’t qualify for repayment requirements.

Can I get a mortgage while on a Minimal Asset Process?

Under a MAP, it is very unlikely you will be able to get a mortgage, as your negative credit score and lack of disposable income will most likely make you ineligible for a lender’s affordability criteria.

Getting a mortgage while on a MAP would also not be advantageous for you as it would make your MAP ineligible, and you would be expected to resume repaying your prior debts. 

As with all debt solutions, it’s generally advised to wait until your debt plan has ended before attempting to take on further credit.

Will a Minimal Asset Process stop bailiffs?

Once you enter into a MAP, all contact from creditors and attempts to receive repayments are ceased. This includes bailiff visits and any direct contact with you to attempt to collect payments.

During your MAP you will no longer need to interact with your creditors directly. Should your financial situation not improve after the 6 months of your MAP, your debts will be written off. However, if your finances improve, or you go above any of the prior thresholds, your creditors will be able to contact you for repayments again. Applying any interest or charges they previously would have.

Should I apply for a Minimal Asset Process?

If you feel you meet the outlined criteria above, a MAP may be a preferable option for those without valuable assets, or the income to repay their debts. Like an IVA, the prospect of being able to write off debts may make a MAP the preferred option. As with all debt solutions, we advise due diligence and research. It is always best to speak to an advisor at an FCA-regulated company, such as MoneyPlus Advice before going ahead. We offer expert advice and can discuss all available solutions with you.

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