Is A Debt Management Plan Or Minimal Asset Process Better For A Smaller Debt?
For most people this is not a free choice. The Minimal Asset Process has a hard statutory gateway, so the first question is whether you qualify for it at all.
The two sit at opposite ends of Scottish debt law. One is a non-statutory agreement in the regulator’s own words, and the other is a sequestration run by the Accountant in Bankruptcy.
- Part of your pay is protected by law
- The deduction is set by statutory tables, not the creditor
- An arrestment can be stopped or replaced
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Smaller debts and wondering about MAP? Check whether you qualify first.
Free, confidential and no obligation.The conditions in section 2(2) of the Bankruptcy (Scotland) Act 2016 rule most people in or out before preference gets a look in.
So this compares them fairly and starts with eligibility rather than pretending both doors are open. Choosing between MAP and a plan generally covers the wider comparison.
Do you actually qualify for the Minimal Asset Process?
Every condition has to be met, not just the headline figures. Missing any one of them closes the route.
The gateway, condition by condition
| The condition | What it requires | Where it comes from |
|---|---|---|
| Income | The common financial tool shows no contribution is required, or you have received certain benefits for at least six months | Section 2(2)(a) and the regulations, in force 30 November 2016 |
| Debt ceiling | Total debts of no more than £25,000 | Section 2(2)(b)(ii), in force 29 March 2021, and student loan debt is left out of the calculation |
| Debt floor | None currently prescribed | The £1,500 floor stopped applying on 6 February 2023, though the power to set one survives |
| Total assets | No more than £2,000 | Section 2(2)(c), in force 30 November 2016 |
| Any single asset | No more than £1,000 | Section 2(2)(d), in force 30 November 2016 |
| A vehicle | One you reasonably require worth no more than £3,000 is disregarded | Section 2(3)(b), in force 30 November 2016 |
| Land | You must own none at all | Section 2(2)(e), in force 30 November 2016, whatever it is worth |
| Previous awards | Ten years since any previous Minimal Asset Process, five since any other sequestration | Section 2(2)(g) and (h), in force 30 November 2016 |
You must not own land. Section 2(2)(e) rules out a MAP for anyone who does, whatever it is worth.
The two that catch people out
Owning any land at all is an absolute bar under section 2(2)(e), with no carve-out for a share.
Ten years must have passed since any previous MAP, and five years since any other award of sequestration.
Both repeat bars run from the date of the previous award rather than from discharge. That is a different date and it matters.
The floor was made prescribable, not abolished
No minimum debt is currently prescribed. The £1,500 floor stopped applying on 6 February 2023 by SSI 2023/9, and the power to set one again survives.
Student loans sit oddly in the arithmetic
Student loan debt does not count towards the £25,000 limit. Section 2(2A), which has applied since 29 March 2021, leaves it out of the calculation.
A student loan is left out of the £25,000 test on the way in and is still owed on the way out.
The £25,000 debt limit for MAP goes through what counts towards it, and whether you are eligible runs through each test.
Smaller debts and not sure which route fits? Get free help
Free, confidential and no obligation.What does a debt management plan ask of you instead?
Nothing, on the way in. There is no threshold, no assessment you can fail and no application to refuse.
The absence of any gateway is the plan’s advantage
A debt management plan is an informal arrangement rather than a statutory scheme. No Act of Parliament creates it, nothing prescribes its form, and it binds nobody by force of law.
Anyone can propose an arrangement to anyone. Owning a house, owning land, having £30,000 of debt or having been sequestrated last year makes no difference to whether you can offer one.
And it is also the plan’s limit
No creditor has to accept a debt management plan, and nothing requires one to give a reason for refusing.
Nothing is approved, so nothing binds anyone. Whether a plan freezes interest sets out what that means for the balance.
You repay in full, over an open-ended period
A plan has no term. It runs until the balances are cleared, which depends on the debt, the payment and whether interest was frozen, and how long a plan lasts sets out the arithmetic.
Do the two genuinely overlap?
Less than the comparison articles suggest. The overlap is narrow, and it is the group the question is really about.
Who has a real choice
- Debts under £25,000, and very little in the way of assets.
- No land of any kind, and no vehicle worth more than £3,000.
- Enough surplus income to make an arrangement realistic, but not so much that the Minimal Asset Process assessment fails.
- No previous award inside the ten-year or five-year bars.
Who has no choice at all
Anyone who owns land, has meaningful savings or has more than £25,000 of debt cannot use the Minimal Asset Process. For them the question is a plan against the other statutory routes.
A protected trust deed needs debts of at least £5,000, and full administration sequestration at least £3,000. When to move to a statutory solution sets out which route fits which situation.
A previous trust deed is not a previous award
The bars in section 2(2)(g) and (h) are keyed to a previous award of sequestration, and a protected trust deed is not an award of sequestration.
A trust deed that converts to sequestration is a different matter, because that produces an award and the ten-year and five-year bars then bite. That is the case people get wrong.
No published guidance addresses either point, so this is the statute speaking rather than anybody’s stated position. Ask your money adviser before relying on it.
And the two routes in are different too
There are two ways in. Either the common financial tool shows you can pay nothing towards your debts, or you have been receiving certain benefits for at least six months.
The benefits route only works if those payments are your only income. Someone receiving universal credit alongside wages goes through the common financial tool assessment instead.
How long does each one take?
Six months against an open-ended commitment. On a smaller debt that difference usually decides the question.
The Minimal Asset Process is short by design
Discharge normally comes six months after the award, under section 140 of the Bankruptcy (Scotland) Act 2016, and how long a MAP lasts covers what happens in the meantime.
There is no debtor contribution in a Minimal Asset Process, because the route in is that you cannot afford one. That is why the six months is realistic.
A plan runs until the money is repaid
A £15,000 balance at £100 a month is over twelve years before any interest is counted. A creditor that keeps charging makes it longer than that.
That is the arithmetic to do before anything else. How long a plan lasts sets out how to do it.
But discharge is not the end of everything
For six months from discharge you must tell anyone providing you with credit that you are required to comply with the section 146 conditions, before obtaining credit of £2,000 or more, or any amount at all while you owe £1,000 or more.
What does each cost, and what becomes public?
The Minimal Asset Process has no application fee and a public register entry. A plan has no register entry and, from a commercial provider, no cap on the fee.
The money
There is no fee to apply for Minimal Asset Process bankruptcy. The fee that used to apply was removed on 6 February 2023, and the Accountant in Bankruptcy’s own guidance lists no application fee.
A commercial provider may charge, and there is no cap on what it may charge.
StepChange and Christians Against Poverty set plans up and run them free of charge.
The record
A Minimal Asset Process appears on the Register of Insolvencies, which the Accountant in Bankruptcy keeps and anyone may inspect.
A debt management plan appears on no register in Scotland. That privacy is the one thing it does better than any statutory route.
The full comparison
| The point | Debt management plan | Minimal Asset Process |
|---|---|---|
| Legal character | Informal, and binding on nobody | A sequestration, awarded by the Accountant in Bankruptcy |
| Eligibility | None at all | Every condition in section 2(2) has to be met |
| Who applies | You, or a firm on your behalf | An approved money adviser, with a certificate for sequestration |
| Application fee | None to the state | None at all for the Minimal Asset Process |
| Interest and charges | Frozen only if the creditor agrees | The debts are dealt with in the sequestration |
| What is written off | Nothing | Most debts, on discharge |
| How long | Until the balances are cleared, with no fixed term | Discharge normally six months after the award |
| Public record | None anywhere | The Register of Insolvencies |
The Accountant in Bankruptcy’s own guide for MAP debtors sets out what the process asks of you, and National Debtline’s Scottish bankruptcy guide is a free second opinion.
And a Debt Relief Order is not an option here
A Debt Relief Order is not available in Scotland and the Minimal Asset Process is not a Scottish version of one. They are separate schemes with different limits and different administrators.
Whether MAP is the Scottish version of a Debt Relief Order deals with the comparison properly.
Which one deals with enforcement that has already started?
Only the Minimal Asset Process. A plan has no statutory effect on diligence at all.
What the award does
| The diligence | Debt management plan | Minimal Asset Process |
|---|---|---|
| An earnings arrestment already running | No effect at all | Ceases to have effect on the date of sequestration, under section 72(2) |
| A new earnings arrestment | Nothing prevents one | Barred for a debt claimable in the sequestration, under section 72(4) |
| A charge for payment | Nothing prevents one | Blocked for the debts in the sequestration |
| A creditor who refuses to take part | Free to do as it likes | Bound anyway |
Section 72(2) of the Debtors (Scotland) Act 1987 ends an earnings arrestment, a current maintenance arrestment and a conjoined arrestment order on the date of sequestration, by operation of law.
What a plan does
A plan does not stop enforcement. It has no statutory effect on diligence at all.
That is a checked absence rather than an oversight, and whether a plan stops a wage arrestment sets out what does.
So if money is already coming off your pay
The comparison stops being about preference. A route that reaches the deduction is worth more than one that does not.
What happens if your circumstances change?
A plan is flexible and a Minimal Asset Process is not. That cuts both ways, and it is the last thing to weigh.
On a plan
The payment can be rebuilt from a new budget, and you can stop whenever you choose. Nothing is protected either, so a change in circumstances can leave you exposed.
In a Minimal Asset Process
An improvement in your income can be reported and the case moved out of the Minimal Asset Process into a full administration, and the Accountant in Bankruptcy’s guide sets out the duties that come with the award.
Reporting is not optional. A change you keep quiet about is a problem rather than an advantage.
Deciding between them
- Do you meet every condition in section 2(2)?
- Can you clear the balances in a period you can live with?
- Is anything already being enforced against you?
- Does a public register entry matter to you, and why?
And get it checked free
Only an approved money adviser can grant the certificate for sequestration and submit the application, so the eligibility question gets answered properly in one appointment. Whether you are eligible sets out what they will look at.
Citizens Advice Scotland, StepChange, Advice Direct Scotland and council money advice teams have approved money advisers and charge nothing, and the difference between a plan and sequestration covers the full administration end of the same scale.
Frequently asked questions
Is there a minimum debt for the Minimal Asset Process?
No minimum is currently prescribed. The £1,500 floor stopped applying on 6 February 2023, though the power to set one again survives.
Does a student loan count towards the £25,000?
No. Student loan debt is left out of the calculation on the way in, and it is not written off on discharge either.
Can I use the Minimal Asset Process if I own a share of land?
No. Owning any land at all is an absolute bar under section 2(2)(e), whatever it is worth and whatever share you hold.
Is there a fee for a Minimal Asset Process?
No. There is no application fee, and the fee that used to apply was removed on 6 February 2023.
Which one stops money coming off my wages?
The Minimal Asset Process. An earnings arrestment ceases to have effect on the date of sequestration under section 72(2), and a debt management plan has no effect on one at all.
Will a Minimal Asset Process be public?
Yes. It appears on the Register of Insolvencies, which anyone may inspect, while a debt management plan appears on no register at all.
How long does each one take?
Discharge from a Minimal Asset Process normally comes six months after the award. A debt management plan has no term and runs until the balances are cleared.
Is a Debt Relief Order an option in Scotland?
No. A Debt Relief Order belongs to England and Wales, and the Minimal Asset Process is a separate scheme with different limits and a different administrator.
Related guides
- Should You Choose MAP Bankruptcy Or A Debt Management Plan? Which one stops money coming off your wages, whether either writes off what you owe, what each costs you, and how long each one lasts.
- Are You Eligible For Minimal Asset Process Bankruptcy? The eight conditions in section 2(2), how the income and benefits routes differ, and how your assets are measured against the limits.
- What Is The £25,000 Debt Limit For MAP Bankruptcy? Which debts count towards the £25,000, why student loans are left out, and what your options are if you owe more than the limit.
- How Long Does MAP Bankruptcy Last In Scotland? Discharge comes six months after the award. The restrictions that follow, and how long the entry sits on the register and your credit file.
- What Is The Difference Between A Debt Management Plan And Sequestration? What each one is in law, whether the debt is repaid or written off, what happens to your home and car, and how long each lasts.
- When Should You Move From A Debt Management Plan To A Statutory Debt Solution? The signs a plan has stopped working, what a statutory route can do that an informal one cannot, and which fits which situation in Scotland.
- How Long Does A Debt Management Plan Last? There is no set term. What decides the length, how unfrozen interest moves the end date, and how a plan can be finished early.
- Does A Debt Management Plan Stop A Wage Arrestment In Scotland? Why an informal plan has no effect on a running arrestment, what does stop one in Scotland, and what a statutory moratorium covers.
- Is MAP Bankruptcy The Scottish Version Of A Debt Relief Order? Two separate schemes, not one. How the money limits differ, why the vehicle rule is a different shape, and which English rules do not apply here.
- What Is A Debt Management Plan? What informal means in practice, which debts go in, what happens to interest and creditor contact, and what a plan cannot do in Scotland.
Written as general information about Scottish debt law rather than regulated financial or legal advice, and your own circumstances may change the answer. Free, impartial help is available from Citizens Advice Scotland, StepChange, National Debtline and Advice Direct Scotland.