The Debt Respite Scheme
The Debt Respite Scheme (Breathing Space) guidance came into force on 4 May 2021. It gives a person with problem debt the right to legal protections from their creditors.
The Scheme will safeguard certain debtors from their creditors. It offers two types of breathing space:
- standard breathing space
- mental health crisis breathing space
Standard Breathing Space
A standard breathing space is available to anyone with problem debt. It gives them a 60-day pause from legal action being taken against them by creditors. During the 60-day period, the person will benefit from a freeze on interest, charges, contact and most enforcement action.
Only debt advice providers (authorised by the Financial Conduct Authority) and a local authority can start a breathing space. There are a number of debt advice providers that you can contact for assistance, as follows:
A debtor who is unlikely to be able to repay their debts can apply for a standard breathing space. All applications will be considered but may not be granted in all circumstances. If someone has assets or could pay their debts with budgeting help, then they may not be granted a breathing space.
In order to grant a breathing space a debt advisor must confirm that the debtor:
- is an individual
- owes a qualifying debt to a creditor
- lives or usually resides in England or Wales
- is not an undischarged bankrupt, has a Debt Relief Order (DRO) or is in an Individual Voluntary Arrangement (IVA)
- does not already have a breathing space or have had one in the preceding 12 months. However, there are no limits on granting Mental Health Crisis Breathing Spaces
A breathing space is not a payment holiday for the debtor and any debt repayment and ongoing liability should still be paid. However, recovery action cannot be taken by a creditor during that period if they do default on an included debt. If a debtor does not meet their liabilities the breathing space may be cancelled by the debt advisor.
Once a breathing space ends, creditors can:
- start applying interest and charges again
- commence enforcement action
- start or carry on with legal proceedings (unless the debtor has entered into an alternative debt solution such as a DRO or IVA
Mental health crisis breathing space
A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and lasts as long as their treatment, plus 30 days from the end of the treatment.
If an Approved Mental Health Professional (AMHP) certifies that a person is receiving mental health crisis treatment, the AMHP’s evidence can be used by a debt adviser to start a mental health crisis breathing space.
The following people can also apply to a debt adviser on behalf of a debtor for a mental health crisis breathing space:
- any debtor receiving mental health crisis treatment
- the debtor’s carer
- Approved Mental Health Professionals
- care co-ordinators appointed for the debtor
- mental health nurses
- social workers
- independent mental health advocates or mental capacity advocates appointed for the debtor
- a debtor’s representative
For a mental health breathing space you should contact Rethink Mental Illness.
Buckinghamshire Council do not currently offer this debt advice service unless you are at risk of losing your home.
Are you are at risk of losing your home?
If you are then Buckinghamshire Council has a duty to provide you with assistance, which could include Debt Advice provided by the Council or one of our partners.
We urge you to contact the housing team as soon as possible, contact details are as follows:
Tel: 01296 585168
Aylesbury online self referral form
Tel: 01494 732013
Chiltern online self referral form
South Bucks Area
Tel: 01494 732013
South Bucks online self referral form
Tel: 01494 421212
Wycombe online self referral form
Visit the Guidance on The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) Regulations 2020 page for more information.