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Minimal Asset Process

Posted 19 December 2016

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The Minimal Asset Process exists to help those struggling the most with their debts in Scotland.

The Minimal Asset Process (MAP) is one way of dealing with your debts, if you can’t afford your repayments anymore and you live in Scotland. As the name suggests, it’s a debt solution that provides a way for people with few assets to deal with their debts.

In this blog, we’re going to have an in depth look into how MAP can help people with their debts, and whether it might be right for you.

 

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Do you qualify for MAP?

As we said, this solution is only available if you live in Scotland. If you live in another part of the UK, a Debt Relief Order (DRO) is a similar solution that might be suitable for you.

To qualify for MAP, you can’t have debts less than £1,500 or more than £17,000.

All your assets can’t be worth more than £2,000 when you add up their value, and no one asset can be worth more than £1,000. Your car is looked at separately – you’re allowed a car that’s worth up to £3,000, as long as it’s essential. The asset rules mean that you can’t be a homeowner and start this solution, or own land.

MAP is designed to help those who are struggling the most with their debts. When you take into account all the things that you have to spend your money on each month, like food, bills and rent, what’s left over is called your disposable income. Other debt solutions require you to pay something towards your debts each month, and this is the amount that you are expected to put towards your debts. In order to qualify for MAP, you must show that you don’t have any disposable income to put towards your debts each month.

How can MAP help with debts?

The Minimal Asset Process is a solution that suspends your payments towards your unsecured debts altogether. Any secured debts still need to be paid. It lasts for six months, so for half a year you don’t have to pay anything towards your unsecured debts. After those six months are over, if your circumstances haven’t improved, they are written off completely. You won’t have to pay anything towards them and your creditors won’t be able to contact you for payment at all.

MAP is also a lot cheaper than Sequestration, which is the Scottish version of bankruptcy. Going through Sequestration costs you £200, whereas MAP is £90.

If your circumstances improve during the course of your MAP, you may have to go through the full Sequestration process and start paying something towards your debts each month.

Are there any downsides to starting MAP?

The common downside to all debt solutions is the damage to your credit history. When you start MAP, it appears on your credit history for six years. If you apply for credit or services like a mobile phone contract or tenancy agreement, the company in question does a credit check on you. This is so they can see how you’ve handled credit in the past. The fact you’ve been on a debt solution can work against you in some circumstances. You still might be able to borrow in the future, but you may have to pay more in interest, as lenders see you as more of a risk.

As MAP is a formal way to deal with insolvency, it isn’t compatible with some jobs. Jobs in the financial sector, such as a bank manager, accountant aren’t usually compatible, as well as jobs with a high level of authority, such as Police Officer or Prison Officer.

How do I apply for MAP?

You’re only able to apply for MAP through an approved Money Advisor. These are advisors that are specially trained to give advice on this solution, like the ones we have here at Debt Advisory Centre.

Before you apply for MAP, it’s important to have an in depth discussion with your a debt advisor about your circumstances and which solution is right for you. You can also have a chat about your employment and whether this solution is compatible with what you do, and what you want to do in the future.

Use the options at the bottom of the page to get in touch with our advisors. You can get them to call you back at a convenient time, or start a livechat.

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.