Debt Advice Handbook Scotland - 1st editionChapter 6: Statutory debt solutions in Scotland4. The Minimal Asset Process Making an application
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Making an application
An application for MAP is made by an authorised debt adviser (or insolvency practitioner) via BASYS, the AiB’s electronic application system. The application must be accompanied by a completed Certificate for Sequestration (see here).
Appointment of trustee
Unlike under the FAB or a PTD, under the MAP, the client cannot appoint their own trustee. The AiB is always the trustee in a MAP bankruptcy. They may ask another insolvency practitioner to act as their agent in a case, but the AiB remains the trustee.
Included and excluded debts
In a bankruptcy, the general rule is that all debts must be included, but not all will be discharged. In a MAP application, the most notable exception to this rule is student loans. This ensures that the debt limit of £25,000 is not exceeded as student loans do not discharge. It must be included in the application, but a tick box allows you to exclude it from the total debt calculation.
Hire purchase debts do not need to be included where the client is making regular payments. They should be entered as ongoing expenditure.
An obligation to pay aliment or a periodical allowance payable on divorce is not discharged by:1s145 B(S)A 2016
    •any liability to pay a fine or other penalty due to the Crown;
    •any liability to pay a fine imposed in a justice of the peace court;
    •any liability under a compensation order (within the meaning of section 249 of the Criminal Procedure (Scotland) Act 1995;
    •any liability to forfeiture of a sum of money deposited in court under section 24(6) of the Criminal Procedure (Scotland) Act 1995;
    •any liability incurred because of fraud or breach of trust.
 
1     s145 B(S)A 2016 »
Debt advice
A client must take advice from an authorised debt or money adviser (or insolvency practitioner) who will assist them in making the application. A client cannot make an application on their own.
The client must also be issued with a Debt Advice and Information Pack.1Reg 11 B(S) Regs
 
1     Reg 11 B(S) Regs »
Fees
There are no fees for a MAP application as there cannot be a contribution.1s2(2)(i) B(S)A 2016
If the client has £1 of disposable income, they are moved to the FAB process.
 
1     s2(2)(i) B(S)A 2016 »
BASYS
MAP applications are processed via BASYS, the AiB’s online tool. Paper applications are still acceptable in specific circumstances, but are very rare. Paper forms and guidance from the AiB on completing the application on BASYS can be found on the AiB website.
Advisers can be registered by their organisation to use the system once they have been through the appropriate training.
The application is in two parts.
Part 1 contains, among other things, the client’s personal details, income and expenditure, assets and liabilities.
Part 2 requires the client to sign several legal statements, including the statement of understanding and the statement of truth and contains a warning that:
’It is a criminal offence under section 8(4) or 218(1) and (2) of the Bankruptcy (Scotland) Act 2016 for you to make a false statement in this form in relation to your assets or business or financial affairs, to not disclose any material fact in this statement or make a material misstatement unless you can show that you did not know that statement was false and had no reason to believe it was false.
On summary conviction, you may be liable to a fine of up to £5,000 or to imprisonment for a maximum period of three months or to both. If you deliberately do not disclose all relevant information or if you deliberately make a false statement when completing this form, you may become subject to bankruptcy restrictions.’
If the client deliberately does not disclose all relevant information, or if they deliberately make a false statement when completing the form, they may become subject to bankruptcy restrictions, a fine or even imprisonment.
Therefore, the client has stated that they have been given advice and that they will comply with the trustee over the 48-month period following the award of bankruptcy. Ensure you point this out to the client before you make the application.
Try to ensure that your client is aware what they are signing. Some advisers get the client to sign a copy of the warning for their records.
BASYS allows an adviser to enter all the details of income, expenditure, assets and liabilities as well as other necessary information for the application.
Once the application is made, it is assessed by the Insolvency Registration Team at the AiB who decides the application, and if it qualifies for the MAP or FAB process.
If the application is incomplete, the client will be sent a further information letter, with a copy sent to the adviser. The client has 21 days to provide the requested information. Failure to do so may result in the application being refused.
BASYS allows the adviser to upload documents such as the Certificate for Sequestration, charge for payment, pay slips, bank statements and any other information required by the AiB.
Training on BASYS can be accessed by advisers via the MATRICS learning programme and from the AiB website (see here).
Statement of undertakings and statement of truth
When making the application, the client must sign a Statement of Undertaking and a Statement of Truth to confirm they have understood the process and their legal obligations. See Appendix 3 for the text of the statements.
The client and adviser may complete the Statement of Truth, Statement of Undertaking and Certificate for Sequestration electronically as long as an ‘averring statement’ is provided by the client. This statement must include the client’s full name, address and date of birth as well as a short statement giving the adviser authorisation to submit an application on their behalf.
Note: it is a criminal offence to make a false statement in these forms, to not disclose any material facts or make a material misstatement unless you can show that you did not know that statement was false and had no reason to believe it was false.1ss8(4) or 218(1) and (2) B(S)A 2016 On summary conviction, you may be fined up to £5,000 or to imprisoned for a maximum of three months, or both.
If you deliberately do not disclose all relevant information or if you deliberately make a false statement when completing this form, you may become subject to bankruptcy restrictions. Therefore, the client has stated that they have been given advice and that they will comply with the trustee over the 48-month period following the award of bankruptcy. Ensure you point this out to the client before you make the application.
 
1     ss8(4) or 218(1) and (2) B(S)A 2016 »
Debtor contribution order
In MAP cases, there must be a zero contribution (or the client must have benefits-only income), so advisers should work with the client and the CFT to try and get the contribution to zero, or even show a negative budget.
This is important because if the CFT is not completed correctly, the AiB may change the contribution and move the client onto the FAB process, lengthening the discharge process.
If the AiB refuses to award a MAP bankruptcy, the client can request a review within 21 days if they disagree with the AiB’s decision. The client can further appeal to the sheriff court within 14 days if they disagree with the review decision.1Part 6 B(S)A 2016
 
Variation of the debt contribution order
If the client’s situation changes during the first six months before the discharge of their debts, they must inform the AiB. The AiB may then vary the DCO and move the client to the FAB process.
The AiB quashes the DCO in MAP cases after six months. If the client’s income then changes, the DCO cannot be varied.
 
1     Part 6 B(S)A 2016 »