What is a no asset procedure?
If you’re in financial difficulty and you can’t pay your debts anymore, an option may be the “no asset procedure” (NAP). The NAP is like bankruptcy but is specifically for people who have a total debt between $1,000 – $40,000.
You only have one chance to enter into a NAP, you must have no assets of worth except for household and personal assets, tools of trade, motor vehicle worth up to $5,000 and cash up to $1,000 and never have been bankrupt previously.
You will also need to do a financial test to show you have no way to pay any money towards your debt. The NAP lasts for 12 months once it’s been approved and you’ll be unable to have a credit of $1,000 or more at any time unless the creditor is aware that you’re currently in a NAP.