What is a Minimal Asset Process (MAP)? Formerly LILA

The Minimal Asset Process (MAP) allows a path into sequestration (otherwise known as bankruptcy), for people on low incomes and with few assets who may not otherwise be eligible for a formal debt relief solution.

As long as the specified criteria are met, you can apply for your own bankruptcy via the Minimal Asset Process and potentially be free of unsecured debts within just six months.

What is the Minimal Asset Process criteria?

In order to be eligible for the MAP route into bankruptcy, the following criteria apply:

• Debts of at least £1,500, but not exceeding £25,000
• Applicants must live in Scotland or have lived in Scotland within the last year
• You must not be a homeowner
• You must be on a low income with little disposable money after all essential bills have been paid, or you must have been in receipt of certain social security benefits for a minimum period of six months
• Your car must be worth less than £3,000
• Your other assets must not be worth more than £2,000 (no single item can be worth more than £1,000)
• Money advice must be provided by a licensed insolvency practitioner or advisor who guides the application process
• Sequestration must not have been awarded during the previous five years
• The debtor must not own any land

The Common Financial Tool is used by money advisors in Scotland to decide on eligibility, and to ensure that the correct insolvency solution is offered.

What are the disadvantages of Minimal Asset Process sequestration?

Apart from having an effect on your credit file, MAP bankruptcy may impact on other areas of life:

• Your employer may take disciplinary action, or even dismiss you if bankruptcy is not allowed as part of your contract of employment
• The bank may close your account, and you may find it difficult to open another
• You could be evicted by your landlord if you have got behind with rent payments
• Self-employed people may find it difficult to trade with diminished access to credit facilities

What are the advantages of taking the MAP path into bankruptcy?

• If you meet all the conditions of MAP, the process lasts no longer than six months so you can start afresh in a relatively short period of time
• There is no fee to use this process, unlike with a ‘standard’ sequestration
• You don’t have to make any payments towards your debt included in the MAP sequestration
• All eligible debts are written off after six months, as long as you have met all the requirements
• The pressure from creditors is relieved – they are not allowed to contact you whilst you are in this process

If you are considering using the MAP process as a route into sequestration or bankruptcy, talk to the experts at Scotland Debt Solutions. We are expert insolvency advisors and can help you decide whether MAP is the best option for you.