Potential reprieve for debtors with mental health issues

The government has approved legal changes to help people struggling with serious mental health issues to seek respite from debt-related interest charges and enforcement action during their treatment. The amendments to the Financial Guidance and Claims Bill don’t have a timeline for their introduction yet, but they do represent a major shift that will change the way people in debt receive support.


Ongoing campaign

The changes are the result of a long campaign by the Money and Mental Health Policy Institute and the group will be monitoring government progress on their promises.

According to their statistics, as many as 23,000 people in England struggled with debt while in hospital for a mental health problem in 2017. These people are now on the government’s radar and can expect greater support in the future.

Speaking to the MPs who raised the matter in parliament, Economic Secretary to the Treasury John Glen said, “The government does recognise… the wide degree of support behind this and the particular issues for those experiencing a mental health crisis.”


Understanding the detail

The changes relate specifically to recently announced ‘breathing space’ rules, which will offer a six-week grace period to individuals stuck in a cycle of problem debt. During this time, they’d be protected against further interest, charges and enforcement action while they seek advice and support.

However, this breathing space period would only begin after the debtor attends a ‘debt advice meeting’ – something that poses problems to those in hospital or under the care of a community crisis team. These latest changes eliminate the need to attend a debt advice meeting in such cases, making it easier for people with mental health difficulties to get support.


Implications for the future

Aside from making a big difference to those who are suffering most from problem debt, the news is a welcome step forward in realising the 'breathing space' rules in full. By showing willingness to press on and refine the laws, the government is issuing a strong reminder that those in debt should, and can, be able to seek help.

If you’re struggling with debt, you can get free, impartial advice from the Money Advice Service. And if you’ve received an enforcement notice from Dukes, contact our team to discuss your situation and set up a manageable repayment plan to clear your debt.