MAPP - Minimum Agreed Payment Plan
WHAT IS A MAPP?
​
MAPP means Minimum Agreed Payment Plan.
When someone enters into a IVA they do it for good reasons and hopefully it could be the best decision they may have made, because by accident they may done the right thing-
​
If creditors are bank loans, store cards, credit cards and overdrafts, it is highly likely that the original creditor will have sold the debt on when someone enters in to an IVA, the reason they do this is as an IVA is classed as bankruptcy, they legally can write the debt off against tax, so they will receive 85% of the amount outstanding, so then only 15% is owed to them.
​
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 the IVA proposal) this is on average is about 15%.
So if someone borrowed £2500.00 the debt will be sold on for 15% which is £375.00
​
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.
​
When a 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.
​
What this means.
By Law when someone contacts the creditor, they are not allowed to ask for proof of income, wage slips, bank statements, and they cannot debt collect unless as no agreement has been made.
​
They can only collect what is offered subject to minimums, this is generally £5 to £10, this is none negotiable by the creditor. They have to accept the minimum payments.
​
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.
​
They have choices, they can write the debt off, or accept a lump sum payment, this is where someone can save whilst they pay, this savings can be offered by the individuals to creditors as the opportunity arises.
Finally this is not an exact science but usually plans like this last 2 years, creditors lose money on minimum payments, they are likely to write off the debt or accept vastly reduced payments
​
In conclusion by doing a MAPP it can be a win win situation, people are paying less per month, their credit rating is improving, and their debts are controlled.
A Typical MAPP Process
​
Step 1.
Client completes their payment plan to National Law Group for the administration and assistance to vacate their IVA and the client is placed in MAPPs (named admin)‘ column.
​
Ideally they will also have received their IVA Termination Report by this time. If they have not received their Termination report they will need to contact their IVA company requesting that their Termination Report be released.
​
​
Step 2.
We will make a spreadsheet containing the client’s 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.
​
Step 3.
Creditor information is uploaded by admin so the MAPPs person can transfer information onto the spreadsheet.
​
Step 4.
Once creditor information is on the spreadsheet, they need to access that creditors online portal with a view to making a repayment offer.
​
Create an account/Get verification code from creditor/client
Set up passwords etc
​
Each portal requires different information.
For example, they may ask for household information which will need to be sent to them.
​
Most portals require some variant of I&E ( Income and Expenditure )- They do not need evidence of the I&E however clients have to show their available income to determine the repayment offer. The payment is related to disposable income, the higher the amount the more they will ask for.
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.
​
Step 6.
Update the spreadsheet with the repayment offer and the response of the creditor needs to be updated.