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Tackling your debts

Dealing with Problem debt in Scotland Part two

Posted 25 October 2015

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Whether it’s DAS, MAP or Sequestration, there are options available for Scots living with problem debt that could transform their financial situation. Read on to find out more.

Yesterday, we let you know about Debt Arrangement Schemes as they’re one route out of debt if you live in Scotland. Today, to carry on our focus on getting out of debt north of the border, we’re going to be looking at Minimal Assets Process and Sequestration.

Minimal Assets Process

This solution is an alternative route into bankruptcy and is designed for people, as the name suggests, who don’t have that much in terms of assets. To be precise you can have no more than £2,000 in total assets (like savings) nor can you have any single asset worth more than £1,000 (your car has to be worth less than £3,000 as well.) Your debts have to be more than £1,500 and less than £17,000.

Your disposable income (the free money you have to spend) must be low to qualify for a MAP, either in the sense that you live solely off benefits, or in the sense that you have nothing left over to put towards your debts each month after you've paid your essential bills and outgoings. Because of the strict rules about assets, this option is off the table if you’re a homeowner.

MAP costs less than normal sequestration (bankruptcy) - £90 instead of £200.

Have a look at our page on MAP.

Sequestration

Sequestration is simply the Scottish term for bankruptcy. To consider this option you really have to be in a position where can’t pay your debts off in a reasonable amount of time.

If you go through Sequestration then a Trustee would oversee the whole process and make sure that everything was done by the book. You’re expected to put all that you can towards you debts but the Trustee will look at your particular situation and assess whether you can afford to contribute or not. The sequestration would normally continue for twelve months and then you would be discharged, it’s at this point that the rest of your debts would be written off. If you are able to put some money towards your debts, you would be expected to do this for 48 months.

So like MAP, it’s only suitable if you have an unmanageable amount of debt, but unlike MAP there are no restrictions on the assets you can have. You must remember, of course, that you’re still expected to put everything you can into the sequestration, so these assets may have to be sold.

Sequestration is a big step and has the potential to have a serious impact on your life, so you should explore all the other options before considering this route. Having said that, it can provide a lifeline if your debts are out of control.

Remember to have a look here for more info.

That’s all for this time – next time we’ll cover the other main debt solution available in Scotland – the Trust Deed.

We hope we have reassured you that there are lots of options available to Scots struggling with unmanageable debts. Out debt advisors have all the knowledge to advise you which route would be best for you. Get in contact using the options to the left to benefit from their experience and skills.

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.