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Do you qualify for the low income debt solution? Let’s find out.
If you’re on a low income, live in Scotland and haven’t got many assets, Minimal Assets Process (MAP) is one debt solution to consider. But there are strict criteria for MAP – so you’ll need to understand if you qualify for it.
So is MAP suitable for you if you want to deal with your problem debts? Let’s take a look at the qualifying criteria and whether it would be better for you to go through sequestration instead.
Do you qualify?
Before we start, let’s first make sure you know what Minimal Assets Process (MAP) is. The Scottish debt solution is for those who can’t afford to put anything towards their debts each month. It means you don’t have to pay anything towards your unsecured debts for six months and if your situation hasn’t improved after that time, your debts are written off. You can find out more about this debt solution with our blog on how Minimal Asset Process works.
To qualify for MAP, you must owe between £1,500 and £17,000. Only unsecured debts can be included in the plan so if you’ve got hire purchase debts, they wouldn’t count. It might go without saying but as it’s a Scottish debt solution, you have to live in Scotland to qualify for MAP.
Your assets can’t be worth more than £2,000 in total. In case you’re not sure what your assets are, it just means your belongings, including any savings or shares. You can’t own a single item worth more than £1,000. Don’t worry – your car isn’t included in this limit. You can also own one car but this can’t be worth more than £3,000. If your car is worth more than this and you want to enter MAP, you might have to sell it and buy a cheaper vehicle.
You also can’t be a homeowner to qualify for MAP. This is because a home is too big of an asset and MAP is really only for those who don’t have very many assets at all.
The main condition you’ll need to meet for MAP is having a low income. This either means you have nothing left after you’ve paid all of your essential bills each month, or it means the only income you have is from income-related benefits like Jobseeker’s Allowance (JSA). A debt advisor can help you work out whether this applies to you.
Lastly, you can’t have been through sequestration or bankruptcy in the last five years or through MAP in the last 10 years.
Minimal Assets Process or sequestration?
If it turns out you are eligible for Minimal Assets Process (MAP), you might be wondering why you’d choose to go through this instead of sequestration. The main benefit of MAP is that it’s much cheaper than sequestration. The total cost for sequestration is £200, while the fee for MAP is just £90.
MAP also has a lower threshold than sequestration as you must owe at least £3,000 to go bankrupt in Scotland. So if you owe more than £1,500 but less than £3,000, MAP is more suitable than sequestration.
It lasts for a shorter time than sequestration too – MAP usually ends after six months but sequestration usually last for 12 months.
What to consider
But Minimal Assets Process (MAP) isn’t without its drawbacks – it can have negative effects on your life as well. Like all debt solutions, it will show on your credit history for six years after you start it. This means that if you apply for any credit during this time, the lenders will see you haven't maintained your contractual payments on your credit history. They could be more likely to turn you down or if they do accept you, it could be at a higher interest rate. While you’re on MAP, you can’t apply for any credit anyway or for six months after the solution has ended.
If your finances do improve during MAP, you might not be able to continue with the debt solution. Instead, you’d have to go through sequestration. If this happened, you might have to make monthly payments towards your debts for up to four years.
As we mentioned above, MAP is only for unsecured debts. If you had any secured debts, you couldn’t include them in the plan. But as MAP stops payments on your unsecured debts you should find it easier to afford your secured debt repayments.
Speak to a debt advisor before you apply for any debt solution. You can get in touch with our debt advisors by using one of the options on the left. One of our approved Money Advisors can speak to you about your debt problems. They’ll look at whether MAP is right for you and, if it’s not, what solutions are more suitable. You can also get free and impartial advice from the Money Advice Service. Just remember, there’s always a way out of debt and it’s important to know you don’t have to go through it alone.
by Emily BancroftBack to blog home