What is Minimal Asset Process?
A Minimal Asset Process (MAP) bankruptcy gives you a fresh start by writing off debts that you can’t repay within a reasonable time. MAP bankruptcy is aimed at people with a lower income and not many assets.
You’ll also need to meet the following criteria:
- You live in Scotland or have lived in Scotland in the last year.
- You’re on a low income.
This can be defined in two ways:
- Your income is made up solely of income-related benefits such as jobseekers allowance (JSA), or the amount of money you earn covers your essential living costs, but you have nothing left over.
- Your debts are more than £1,500 and less than £25,000.
- Your car is worth £3,000 or less.
- Your other assets are worth less than £2,000 in total, with no single item worth more than £1,000.
- You’re not a homeowner or own land.
- You haven’t been bankrupt in the last five years.
Things to consider:
MAP is only available for residents of Scotland.
The MAP will appear on your credit file for 6 years. Your credit rating will therefore be affected while you’re subject to the MAP and for a period thereafter. Your bankruptcy will also be recorded on the public Register of Insolvencies.
Most jobs will not be affected by MAP. However, if you enter MAP it is possible that you may be disqualified from holding certain posts or offices. Check the terms and conditions of your contract or your professional codes of practice to see if there are restrictions. You can also not act as a Director of a Limited Company for the duration of the MAP.
Even though you may not have many assets if you enter MAP, it’s likely that any valuable assets will need to be sold, to go towards repayment of your debts.
Restrictions will apply for a further six months after the MAP has completed.
Your bank is likely to close or freeze your accounts, and you may only be able to get a basic bank account.
Some private landlords may evict tenants or not renew a tenancy agreement if you become bankrupt.
Some debts, such as student loans, ongoing child maintenance and court fines are not included.
If you’re self-employed, bankruptcy could make it harder to trade and obtain credit for goods and services.
Benefits:
Although MAP bankruptcy is a formal legal process, you won’t need to appear in court.
MAP bankruptcy costs £50 to apply for, which is cheaper than sequestration. This fee is payable to the Accountant in Bankruptcy, but it may be reduced to £0 if you receive certain benefits.
You’ll usually be discharged from your MAP bankruptcy after six months, after which most debts will be legally written off.
Once your MAP bankruptcy is approved, your creditors can’t chase you for payment or add more interest and charges to your debts, and they can’t take any court action.
Most unsecured debts are included in MAP bankruptcy.
If you have a debt in joint names with someone else, this can be included in the MAP. However, your creditors may still chase the other person for all the debt.