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Breathing Space

 

Effective date: 4 May 2021

What is Breathing Space?

Breathing Space, more formally known as The Debt Respite Scheme (England and Wales) Regulations 2020, gives individuals with problem debt the right to a statutory respite period, enabling them to work with a debt advisor to find an appropriate long-term debt solution. Meaning it will freeze interest payments and suspend enforcement action for individuals for a specific timeframe.

There are two types of breathing space: standard and mental health crisis.

  • Standard breathing space

Available to individuals with problem debt. It gives them up to 60 days’ relief from any action, including enforcement action and contact from owed creditors. The period of 60 days’ breathing space also freezes any interest charges.

Breathing space can only be used / access once within one year (12-month period).

  • Mental health crisis breathing space

The mental health crisis breathing space lasts the duration of the individual’s treatment plus an additional 30 days. Unlike the standard breathing space, there is no limit on access to the mental health breathing space; it can be used whenever an individual is in mental health crisis.

 
When is breathing space effective?

Breathing space was introduced on May 4th, 2021

How to get breathing space

Breathing space can only be initiated by:

  • A local authority

  • A debt advice provider authorised by the FCA to provide debt counselling

You cannot ask your creditors or enforcement company for breathing space or advise them that you have it. The creditor or enforcement company recovering your debts will only take instructions on this matter from the above personnel.

The importance of breathing space

The Government has forecast that:
  • 700,000 people will be helped by breathing space in the first year, rising in time to over a million a year

  • 25,000 – 50,000 a year are expected to receive a breathing space via a specific route designed to support those in mental health crisis treatment

The full impact assessment can be viewed here, and it comes with the caveat that this was a pre-COVID-19 assessment, so the actual figures will likely differ.

What action needs to be taken by the creditor or claimant

The responsibility lies with the creditor to inform the enforcement agent that an individual (debtor) has been served with a breathing space notice.

Once an enforcement agent has been served by a breathing space notice, this will suspend any enforcement action against that debtor by another creditor.

Temporary suspension for enforcement activities

During the applied breathing space period, enforcement agents will not be able to:

  • Contact the debtor

  • Give notice of enforcement

  • Obtain a warrant or writ

  • Take control of goods

  • Visit the debtor’s home or business

  • Serve notice of property possession

  • Take possession of property

  • Sell any of the debtor’s goods, unless the agent took them before the breathing space started

If an enforcement agent has taken control of any goods by removing them and securing them elsewhere before a breathing space started, the goods may be sold during the breathing space and the costs of the sale deducted from the proceeds. However, fees accrued during the breathing space for storage of those goods cannot be charged either during the breathing space, or after it ends.

Debts included in breathing space
  • Credit cards

  • Store cards

  • Personal loans

  • Pay day loans

  • Overdrafts

  • Utility bill arrears

  • Mortgage or rent arrears

  • Government debt such as council tax

  • Debt owed by an individual to a business or another individual

Debts not covered under breathing space

Where business or commercial debt relates only to the business and not the debtor personally.

 

Useful links to find out more
  1. The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

  2. Breathing Space to help millions in debt - GOV.UK

 

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