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Minimal Asset Process and Advice

Minimal Asset Process and Advice. Chris Boyland Strategic Reform. Minimal Assets Process (MAP). The Low Income Low Asset (LILA) Regulations will be revoked . The Bankruptcy and Debt Advice (Scotland) Act 2014 ( BADA (S)) provides for a new MAP route into bankruptcy.

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Minimal Asset Process and Advice

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  1. Minimal Asset Process and Advice Chris Boyland Strategic Reform

  2. Minimal Assets Process (MAP) • The Low Income Low Asset (LILA) Regulations will be revoked. • The Bankruptcy and Debt Advice (Scotland) Act 2014 (BADA(S)) provides for a new MAP route into bankruptcy. • MAP regulations will be laid in late summer this year and will commence on 1 April 2015. • The Debtor application fee to enter bankruptcy via MAP will be instructed in the fees order and will be £90.00.

  3. Minimal Assets Process (MAP) The MAP will make debt relief simpler and cheaper for debtors who have been given money advice and who: • have few assets; • small debts (£17,000 or less); • no ownership of property; • have been assessed using the CFT as having no surplus income to pay a contribution or who have been in receipt of a prescribed payment for a period of at least 6 months; and • have not entered bankruptcy by debtor application to MAP in the previous 10 years; or • had an award of bankruptcy ( by either creditor petition or debtor application) in the 5 years previous to making an application for bankruptcy via MAP.

  4. Minimal Assets Process (MAP) The MAP Regulations will : • Define the criteria required to enter into bankruptcy via MAP (set out in the previous slide). • Define a “prescribed payment” as income that is solely derived from Universal Credit or the income based benefits. • Require the debtor to pay the difference between the MAP and full administration bankruptcy fees

  5. Advice • Prior to entering into any Scottish statutory debt solutions, the individual must be made aware of the full implications of all of the available debt solutions and must be given the following money advice from an approved adviser: – • Advice on the debtor’s financial circumstances • Advice on the consequences of the proposed sequestration • Advice in the preparation of the application • Advice on any other relevant matters • The debtor application must include a declaration to prove that money advice has been given.

  6. Advice • Categories of approved money advisers are prescribed in the 2011 DAS Regulations (which will be amended later this year) for the purposes of being approved to provide a DPP under DAS. • The majority of debtors currently receive advice prior to making an application for a statutory debt solution e.g. before a Certificate for Sequestration is signed. • AiB’s analysis suggests that the requirements of BADA(S) will lead to a 6-8% increase in the number of debtors who require advice or the equivalent of approximately additional 500 cases across Scotland.

  7. THANK YOU Chris Boyland, Head of Strategic Reform 0141 278 4412, chris.boyland@aib.gsi.gov.uk 1 Pennyburn Road, Kilwinning, Ayrshire, KA13 6SA T 0300 200 2600 F 0300 200 2601 W www.aib.gov.uk

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