MAPP - Minimum Agreed Payment Plan
WHAT IS A MAPP?
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MAPP mean Minimum Acceptable Payment Plan.
When you entered into your IVA you did it for good reason and hopefully it is the best decision you have made, because by accident you have done the right thing for you!
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If your creditors are bank loans, store cards, credit cards and overdrafts, it is highly likely that your original creditor will have sold your debt on when you enter an IVA, the reason they do this is as an IVA is classed as bankruptcy they legally can write your debt off against tax, so they will receive 85% of the amount outstanding, so you then only owe them 15%.
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The original creditor can keep the debt and take what they get from the IVA or sell it, or even write it off, (usually below £1000.00 )
They usually sell it for whatever the amount offered to creditors is, (this can be seen in your IVA proposal) this is on average about 15%.
So if you borrowed £2500.00 the debt will be sold for 15% which is £375.00
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The new company will try to collect the original amount £2500.00 but they have accepted in an IVA 15% so they will get £375.00 but over 5 years.
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When your IVA fails, the new creditor has choices, they can try to collect, write it off or accept a payment, or reduced lump sum.
If they write it off they are entitled to collect 85% of the debt outstanding as tax relief.
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What this means to you.
By Law when we contact the creditor, they are not allowed to ask for proof of income, wage slips, bank statements, and they can not debt collect unless no agreement has been made.
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They can only collect what you offer subject to minimums, this is generally £5 to £10, this is none negotiable by the creditor.
They have to accept the minimum payment.
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What happens when payments are set up.
Creditors can request reviews every 6 months or 12 months, but they have to accept the original payment.
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They have choices, they can write the debt off, or accept a lump sum payment, this is where we will encourage you to save whilst you pay, this can be offered to creditors as the plan develops.
Finally this is not an exact science but usually plans like this last 2 years, creditors lose money on minimum payment, they are likely to write off the debt or accept vastly reduced payments
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In conclusion by doing a MAPP you are in a win win situation, you are paying less per month, your credit rating is improving, and your debts are controlled.
MAPPs Process
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Step 1.
Client completes their payment plan to National Law and client is placed in MAPPs (named admin)‘ column.
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Ideally they will also have received their IVA Termination Report by this time. If they have not received their Termination report you need to provide the client with a template to their IVA company requesting that their Termination Report be released.
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Most clients will by this point know they will be placed in a MAPP as hopefully it was their decision which debt solution to opt for earlier in the process. (Some DRO clients may find that their financial situation has changed during the 8 months they have been paying National Law and may no longer qualify for a DRO and therefore need to be transferred to a MAPP)
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Step 2.
We make a spreadsheet containing the clients personal information and send them an email informing them of this with an invitation to send any communications from creditors to the admin email so that it can be uploaded onto their files.
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Step 3.
Creditor information is uploaded by admin so the MAPPs person can transfer information onto the spreadsheet.
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Step 4.
Once creditor information is on the spreadsheet you need to access that creditors online portal with a view to making a repayment offer.
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Create an account/Get verification code from creditor/client
Set up passwords etc
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Each portal requires different information.
Moorcroft asks for household information which we don’t hold on file so an email is sent requesting the information from the client.
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Most portals require some variant of I&E - They do not need evidence of the I&E however you have to show their available income to determine the repayment offer. If you show too much disposable income they will expect the client to repay at a much higher rate.
Step 5.
Submit the application.
Send an email to the client confirming the creditor and amount offered and ask them to let you know if the application was successful.
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Step 6.
Update the spreadsheet with the repayment offer and the response of the creditor.