Sequestration or Bankruptcy are the most severe forms of insolvency, with the biggest risks attached to them and consequences for homeowners and those with certain careers. Entering into either DRO or MAP is a decision that shouldn't be taken lightly, and only after speaking to a qualified money advisor. Although both DRO and MAP are formal debt solutions, you do not need to appear in court.
During the recent Coronavirus Bill amendments, the Scottish government announced that until the end of September 2020, the fee to apply for MAP has been reduced to £50. However, this fee has been waived for people on certain benefits. In the rest of the UK, the Debt Relief Order application fee is £90.
Again due to recent Government amendments, the amount of debt that you can owe in order to be eligible for a Minimal Asset Process is a minimum of £1,500 and a maximum of £25,000. Usually, this would be a maximum of £17,000. The maximum amount of debt required to be eligible for a Debt Relief Order in England, Northern Ireland or Wales is £20,000.
You cannot apply for either the Debt Relief Order or Minimal Asset Process if you are a homeowner and if you have a car valued at over £3,000, you cannot apply for a Minimal Asset Process.
Debts are written off with a Debt Relief Order after 12 months whereas the Minimal Asset Process duration is 6 months.
Self-employed, small business debt help solutions exist but generally, a Debt Relief Order or Minimal Asset Process may not be the best way of getting your finance back on track due to the restrictive nature and impact on your ability to obtain credit for cashflow purposes.