All you need to know . . .
What is a Minimal Asset Process?
If you’re struggling with debt and reside in Scotland, a Minimal Asset Process is one of a number of possible debt solutions available to you. A Minimal Asset Process (also referred to as a MAP) is a form of insolvency, similar to sequestration. Residents in England, Northern Ireland and Wales have a similar option available to them, known as a Debt Relief Order (DRO). While there may be similarities between the two options, a MAP and a DRO are not exactly alike.
A legally binding solution to help you write off unsecured debt. It is a formal agreement between you and your creditors.
A Minimal Asset Process is suitable for someone on a low income who’s unable to repay his/her outstanding debts. You must have unsecured debt of less than £17,000, not be a home owner, and have very few assets to be considered eligible.
A MAP is a legally binding arrangement between you and your creditors. It is similar to sequestration in some aspects, designed to help you write off any unsecured debt that you’re unable to repay. After the fixed period, usually 6 months, qualifying debt will be wiped away, giving you a fresh start.
The promise of writing off your debt can sound appealing to many, and this may make you want to apply for a MAP as soon as possible, however, there are a number of factors you must consider. If you’re not eligible for a MAP or your financial circumstances are due to change in the foreseeable future, you will not be able to proceed. Applying for a Minimal Asset Process can be a straightforward process with the right advice and guidance. Depending on your current financial situation, it may be the most suitable option available to becoming debt free for people on a low income with very few assets.
If you’re wondering if a Minimal Asset Process is the right solution for you, speak to a debt management specialist at Refresh Debt Services for FREE advice on 0800 121 48 63 or complete the online form on this page.
What are the benefits of a Minimal Asset Process?
Once a MAP is in place, you won’t have to make repayments to most types of unsecured debts that have been included within the application. Most of your creditors (people and/or companies that you owe money to) will not be able to force you to make payments to your debts. Generally, after 6 months, any qualifying debt will be written off. However, it is important to remember that you will still be liable to pay any debts that were not included in the initial application and debts that aren’t eligible for inclusion within the Minimal Asset Process.
What are the drawbacks of a Minimal Asset Process?
Although your debts will be written off after 6 months, the effects of a Minimal Asset Process will last for an additional 5 years. Your credit file will be affected as you will be declared insolvent through the Register of Insolvencies (ROI). This can affect your credit rating for 6 years from the time your MAP begins. Your bank may also close or freeze your bank account(s), and you may only be able to open up a basic account. Becoming insolvent through a MAP may lead to disciplinary action or even dismissal in some jobs.
A MAP is a formal and legally binding agreement between you and your creditors. Not all creditors can be included. If your monthly income increases through a pay rise or you activate a ‘windfall clause’, your MAP could be terminated.
If you would like to discuss the advantages and disadvantages of a MAP with a Refresh debt advisor, call 0800 121 48 63 or use the online contact form on this page.
How to apply for a Minimal Asset Process
If you have decided that a MAP is the right solution for your circumstances, we will put you in contact with a professional insolvency practitioner, should you need further help or advice, we’ll be right here to help.
Your insolvency practitioner will help you set up and complete the MAP. He/she will confirm that you understand how the MAP will work. At this stage, you will have to provide details about your income, assets, debts and creditors in order to see if you’re eligible, and to identify which debts can be included. This process will look to ensure that you meet the qualifying criteria before submitting your application, and that all eligible debts are included within the MAP.
Once your application has been sent, the insolvency practitioner will pass the terms of the MAP to your creditors and the Accountant in Bankruptcy (AiB). Your insolvency practitioner will inform the courts that your Minimal Asset Process has been approved, and file all the necessary paperwork for you. Your details will now also be included on the Register of Insolvency for 5 years.
if you come into a windfall or receive a pay increase, the insolvency practitioner must be notified immediately as this may affect the terms of the MAP.
Apply now by calling 0800 121 48 63 or use the online contact form on the right.
How much will I have to pay for a Minimal Asset Process?
A Minimal Asset Process will cost you £90, it costs a lot less than sequestration. The debt solution provides a number of advantages and disadvantages, you will require the assistance of a professional money advisor. The fee will be paid directly to the Account in Bankruptcy. You’re only able to apply for a MAP once every six years. Make sure that the information you provide on your application is accurate.
Once the application has been submitted and you have paid the £90 fee, the Minimal Asset Process should be granted if you’re eligible.
Most MAPs will include a ‘windfall clause’, this means that if you come into any money during the course of the MAP, you will have to declare it to your money advisor as a source of income. These windfalls can include things like a pay increase at work. If you’re lucky enough to win the lottery or unfortunate enough to lose a family member, any winnings or inheritance could be given to your creditors as part of this windfall clause.
Who is eligible for a Minimal Asset Process?
If you want to apply for a MAP, you must meet the right criteria in order to be considered eligible. Since MAPs are a legally binding agreement between several parties, the following conditions must be met, or your application will not be accepted:
• You’re unable to pay your debts
• Total unsecured debt must be more than £1,500 but less than £17,000
• The value of your vehicle does not exceed £3,000
• Total assets must not exceed £2,000, with no single item worth more than £1,000 (home owners are not eligible)
• You haven’t been subject to a Trust Deed, Debt Arrangement Scheme, or Sequestration within the last 6 years
• You must currently live in Scotland, or have lived in Scotland during the last 12 months
If you fall into these categories, a MAP may be the right debt solution for you. To find out more about setting up a MAP, call us on 0800 121 48 63 or complete the online form on this page.
What type of debt can be covered by a Minimal Asset Process?
A Minimal Asset Process is inherently designed to tackle multiple debts at the same time, there is a list of debts which can be included under the agreement. If you’re struggling with any of the following ‘non-priority debts’ listed below, a MAP could help you write off your unsecured debts.
• Personal loans
• Pay day loans
• Credit cards
• Store cards
• Overdraft, including fees and charges
There are also ‘priority debts’ which can be included within the MAP, these priority debts may include council tax arrears, benefit overpayments, repossessed asset debts and utility debts such as gas, electricity or water.
There are debts which can’t be included within a MAP, such as court orders permitting to court fines, child maintenance, child support or student loans. If you are having trouble making payments to any of these, they must be dealt with separately.
If any debts have amounted due to fraud, these can’t be included and will still have to be paid once the MAP has been completed.
Is my home at risk if I take out a Minimal Asset Process?
Home owners are unable to apply for a Minimal Asset Process. If you are a home owner and having difficulty with repaying debts, we recommend speaking to one of our expert advisors to see what alternative solutions are available to you.
Need more advice?
If after reading this, you believe that a Minimal Asset Process may be the right solution for you, contact our expert debt advisors to discuss the advantages and disadvantages of using a MAP to become debt free. We’ll provide you with advice and guidance and be able to discuss a number of wider financial solutions available to you, ultimately helping you make the right decision for your future.
Call now on 0800 121 48 63 or use the contact form on this page to request a call-back.