From the 1st April 2015, the Low Income Low Asset route to bankruptcy in Scotland is no longer available and has been replaced with the Minimal Asset Process (MAP) solution.
The MAP bankruptcy exists to help a person resolve their unsecured debts which they cannot repay, as long as they meet the criteria. Generally to qualify, you must have a small amount of income and a low value in your assets.
The MAP bankruptcy is cheaper than a certificate of sequestration application. You would need to speak to an approved money advisor who would complete the paperwork online for you. At the same time you would pay the MAP fee which is £90.
Qualify for a Minimal Asset Process (MAP)
There is criteria to be applicable for a bankruptcy via the Minimal Asset Process route. To qualify you must:
- Live in Scotland. If you live elsewhere in the UK you could consider a Debt Relief Order.
- Your debts must not exceed £17,000 and must be at least £1,500. Until the end of March 2021, your debt can be as much as £25,000 or less.
- You are living on a low income. If you’re income is solely state benefits then you will qualify for a MAP if you have been in receipt of these benefits for 6 months. You would also qualify if you have no available money to pay towards your creditors after paying your essential living costs.
- Your car must be worth £3,000 or less. Any other assets must not be valued at more than £2,000 in total, with a single asset not valued at more than £1,000.
- You cannot own a property.
- You cannot have been made bankrupt in the last 5 years.
Advantages Of MAP
- So long as you meet all the requirements, your debt will be written off after 6 months
- If you have no disposable income you will not be asked to make any payments towards your debt
- The creditors are no longer allowed to contact you regarding your debt, which can ease the stress and worry financial problems often cause
- The cost to enter sequestration via the MAP route is cheaper than a certificate of sequestration.
Disadvantages Of MAP
- You will be prevented from becoming a company director while you are in the debt solution and it may affect future job applications.
- The MAP will remain on your credit file for 6 years, making obtaining credit difficult.
- Courts could impose a restriction order which extends the process for up to 15 years, if you don’t abide by the conditions of the MAP.
- If your financial circumstances improve after you have entered the MAP, the insolvency practitioner may ask you to enter certificate of sequestration and make regular payments.
Advice on Minimal Asset Process Bankruptcy
You can seek advice on a Minimal Asset Process bankruptcy from a registered charity:
StepChange: 0800 138 1111
Debt Advice Foundation: 0800 043 40 50
Citizens Advice Bureau: 0808 223 1133
National Debtline: 0808 808 4000