Minimal asset process (MAP) bankruptcy:
A minimal asset process bankruptcy allows you to start afresh by writing off debts that you cannot repay within a reasonable time. It is aimed at people with not many assets and a low income and is more straightforward and cheaper than sequestration bankruptcy.
If you live in Scotland, this solution is available. If you live either in England, Wales or Northern Ireland you will be able to apply for debt relief order, which is a similar solution, but it is important to note that it has different fees, risks and benefits associated with it.
Thinking of applying for MAP bankruptcy? Things you must consider:
Before making a division to apply for MAP bankruptcy, you must consider these points:
- Most debts are included but if you have any court fines, student loans or child maintenance arrears that you still need to make payments for them.
- You can only apply for MAP from an approved money advice organisation such as Free Debt Helpline.
- During the MAP bankruptcy you will not be able to access any further credit so you will have to stick to your budget once everything is in place.
- Bankruptcy will make it harder to trade and obtain credit for goods or services if you are self-employed.
- You will need to check if it will affect your job.
- Bankruptcy can lead to disciplinary action or dismissal in certain jobs such as those working in financial services or the legal profession.
- You will need to provide proof of your income and expenditure such as bank statements and payslips.
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Who could apply for MAP bankruptcy?
You must meet the following conditions before you apply for MAP:
- You reside in Scotland
- you are on a low income. This can be defined in two ways: the amount of money you earn covers your essential living costs but you have nothing left over or your income is made up solely of income- related benefits such as jobseekers allowance (JSA).
- Your debts are £1,500 or more and £17,000 or less.
- Your car costs £3,000 or less.
- Your other assets are less than £2,000 in total with no single item worth £1,000 or more.
- You are not a homeowner.
- You have not been bankrupt in the last five years.
How does the process MAP bankruptcy works?
In order to apply for MAP you need to pay £90 of fee. The full amount has to be paid and reductions or exemptions are unavailable.
You cannot apply without getting advice from an approved money advice organisation such as Free Debt Helpline.
We can help you work out if MAP is the best option for yourself. If so we will ask you to send us details of your debts and incomes. We will provide all the support you need and check all your paperwork.
You should also be aware that with MAP bankruptcy your details will be put on a public register entitled the Register of Insolvencies (ROI) for a five years.
Could my creditors contact me?
Your creditors cannot contact you or take any legal action against you to collect the debt once your MAP bankruptcy has been approved.
How long does MAP last?
It will last for six months. your debts will get written off but you cannot apply for any further credit for six months.
What debts can be included in MAP?
Most debts are included but if you have any court fines, student loans or child maintenance arrears you will need to keep paying these as usual.
How will my credit file be affected?
MAP bankruptcy will appear on your credit file for six years and you will find it much difficult to get further credit during this time. Your details will also be on a public register of insolvencies.
Could it affect my job, home or bank account?
It will affect you in other ways depending on your individual circumstances, for example:
- Your bank will close your account and you will find it hard to open a replacement
- Bankruptcy can result to either disciplinary action or dismissal in certain jobs
- Your landlord will evict you if you are living in private rented house or that you have rent arrears.
- If you’re self-employed, bankruptcy may make it harder to trade, especially if you rely on credit to pay for stock or services