Minimal Asset Process.
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Minimal Asset Process.
Solution for Scotland
May not be suitable for all. No loans provided. Fees and disadvantages may apply depending on the solution, Read here
Honesty and Integrity
We make a difference
How can a Minimal Asset Process (MAP) help me?
The Minimal Asset Process (MAP) is a debt solution in Scotland designed to help people with low income and minimal assets achieve debt relief. It allows individuals to write off unsecured debts if they meet specific criteria, such as limited income and assets below a certain value. MAP is a simplified form of bankruptcy, offering a fresh financial start for those struggling with unmanageable debt.
How does it work?
The Minimal Asset Process (MAP) works as a streamlined form of bankruptcy in Scotland, specifically for people with low income and limited assets. Here’s how it generally works:
- Eligibility Assessment: To qualify, individuals must meet certain criteria, owe less than £25,000 in unsecured debt, having assets worth less than £2,000 total (with no single asset worth more than £1,000), and not owning a home. Income must be low enough that there is no surplus for debt payments after essential expenses.
- Application and Fee: Applicants pay a one-time fee (around £50), then apply to the Accountant in Bankruptcy (AiB), the organisation that administers the MAP.
- Debt Relief and Discharge: Once approved, individuals stop paying unsecured debts and are protected from creditor action. Typically, debts are written off, and after six months, the applicant is discharged from most debts, offering a fresh financial start.
This process is quick, affordable, and designed to provide relief to those who cannot repay their debts due to limited financial means.
How does a Trust Deed work?
A trust deed works as a formal agreement where you commit to repaying part of your debt over a set period, typically with manageable monthly payments. Here’s a step-by-step breakdown:
- Assessment of Finances: A licensed trustee evaluates your financial situation, including income, expenses, assets, and total debts, to determine a realistic payment plan.
- Agreement with Creditors: The trustee proposes the plan to your creditors. If most creditors agree, the trust deed becomes “protected,” meaning creditors cannot take further legal action or add interest on the debt.
- Repayment Period: You make regular payments to the trustee over a period, usually around four years. The trustee distributes these payments to your creditors.
- Debt Write-Off: After successfully completing the agreed term, any remaining debt is written off, giving you a fresh financial start.
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Minimal Asset Process (MAP) FAQs.
Here are four frequently asked questions
Who qualifies for the MAP?
To qualify, you must owe less than £25,000 in unsecured debt, have minimal assets (valued under £2,000 in total, with no single item worth more than £1,000), not own a home, and have a low income with no disposable funds to repay debts.
What types of debt can be included in the MAP?
MAP can cover most unsecured debts, such as credit cards, personal loans, and utility arrears. However, certain debts like student loans, court fines, and child support arrears are excluded and cannot be written off.
How long does the MAP process take?
The process typically lasts six months, after which, if there are no issues, you will be discharged from most of your included debts, meaning they are effectively written off.
What are the fees involved in MAP?
There is a one-time application fee of £50. Beyond this fee, there are generally no additional costs for the MAP process, making it an affordable option for those struggling financially.
Eligibility criteria for Minimal Asset Scheme (MAP):.
Debt Amount: You must have unsecured debts less than £25,000.
Income Level: You should have low income, with no surplus funds to contribute toward your debts after essential living expenses.
Asset Limit: Your assets must be minimal, with a total value of less than £2,000. No single asset (excluding a car) can be worth more than £1,000.
Car Ownership: If you own a car, its value must not exceed £3,000.
Residency: You must be a resident of Scotland or have lived there within the last year.
Previous Bankruptcies: You must not have been declared bankrupt in the last five years, including previous use of MAP.
Here are some typical examples.
Individual Voluntary Arrangement Example
Example case completed in 2024
Repayment calculated using income and expenditure data. Monthly payments and write off percentages are based on individual circumstances.
IVA is typically for a period of 60 months, depending on your homeowner status
Nominees fees £1,900 & Supervisors fees £1,750 = total fees £3,650, this amount is deducted from the repayment amount over the 5 year period
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At Debt Advisory Services Scotland, we are your…
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Minimal Asset Process Fees.
The Minimal Asset Process (MAP) in Scotland has a one-time application fee of £50. This fee covers the entire MAP process, and there are typically no additional fees or costs involved. The fee is designed to make MAP an affordable debt solution for individuals with limited income and assets. In cases of extreme financial hardship, some charitable organisations may help with the MAP fee.
A Protected Trust Deed (PTD) can only be provided by an organisation with a licensed Insolvency Practitioner, such as Debt Advisory Services Scotland. The initial advice is free, and fees for a PTD are consistent across providers, as outlined below.
To set up a PTD, your Insolvency Practitioner (or trustee) will assess your income and expenses to determine an affordable monthly payment for your creditors, factoring in your essential bills and living costs. PTD fees and costs are deducted from these payments, and the remaining amount is distributed to creditors. This split and the trustee’s fees are reviewed and approved by your creditors as part of the process to achieve protected status.
The trustee’s fees generally include:
- A fixed fee, ranging from £1,000 to £2,500, depending on the complexity of the PTD.
- A realisation fee, usually 10-20% of the funds received.
The Accountant in Bankruptcy (AiB), a Scottish Government agency, supervises PTDs and can audit the trustee’s fees for a 5% charge if requested by you or your creditors, which would reduce funds available to creditors.
During the 4-year PTD term (or longer if needed), the trustee and their qualified staff will:
- Prepare and present your PTD proposal to creditors.
- Obtain protected status for the PTD.
- Handle creditor and AiB communications.
- Monitor your payments and any changes in your financial situation.
- Annually review your finances and update creditors on PTD progress.
- Distribute dividends to creditors and finalize the PTD at completion.
Example of PTD costs and outcomes:
- Monthly Payment: £206
- Total Debt: £21,460
- Term: 48 months
Advantages of the Minimal Asset Process
The advantages of the Debt Arrangement Scheme (DAS) are:
Affordable Solution: With a one-time fee of £50, MAP is accessible to those with limited financial means.
Debt Relief: It offers a fresh start by writing off most unsecured debts after six months, relieving financial pressure.
Creditor Protection: Once accepted into MAP, you are protected from creditor actions, including harassment and legal proceedings.
Quick Resolution: The MAP process is typically completed within six months, offering faster relief than other debt solutions.
Disadvantages of the Minimal Asset Process
Asset and Income Limits: Only individuals with low income and minimal assets qualify, limiting its availability to those in specific financial situations.
Effect on Credit Rating: MAP remains on your credit report for six years, significantly impacting your ability to obtain future credit.
Exclusion of Certain Debts: Some debts, like student loans, and court fines, cannot be included, so they remain outstanding.
Restrictions on Financial Activities: During MAP, there may be restrictions on applying for new credit or managing finances, and your name may appear on the public insolvency register.
Minimal Asset Process FAQ Continued.
Can I apply for MAP if I have been bankrupt before?
You cannot apply for MAP if you have been declared bankrupt within the last five years, including any previous use of MAP. This rule ensures that MAP is only used as a last resort for individuals facing financial hardship.
Will my credit rating be affected by MAP?
Yes, entering into MAP will have a significant impact on your credit rating. The MAP will stay on your credit file for six years, which may limit your ability to obtain credit during that period.
What happens if my financial situation changes during the MAP process?
If your financial situation improves significantly during the six-month MAP process, you must inform the Accountant in Bankruptcy (AiB). They will review your case to determine if MAP is still the appropriate debt solution for you and you may be transferred to a full administration Bankruptcy.
Will my employer find out that I’m using MAP?
MAP is recorded on the public Register of Insolvencies, which anyone can access. However, your employer will only find out if they check the register or if you are legally required to inform them due to your employment terms.
Can I get credit while on the MAP?
During the MAP process, you are generally not allowed to take out credit over £2,000 without informing the lender of your MAP status. This restriction aims to prevent further debt accumulation during the relief process.
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Industry Standards
As a proud member of DEMSA, we are deeply committed to maintaining the highest industry standards.
This commitment ensures that our debt management services are conducted with the utmost ethical integrity, transparency, and professionalism.
We strive to build trust with both our clients and creditors, providing solutions that not only meet regulatory requirements but also foster confidence in our approach.
Our adherence to DEMSA’s rigorous standards reinforces our dedication to delivering reliable, trustworthy advice and support throughout your financial journey.
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