4th May 2021 marks the introduction of a new scheme known as Breathing Space which aims to help people who are struggling to cope with problem debt by allowing them protection from their creditors so they can get advice or mental health treatment.
There are two types of breathing space: a standard breathing space and a mental health crisis breathing space.
A standard breathing space is available to anyone with problem debt. It gives them legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts. This ensures they have the time for a professional debt adviser to put a suitable solution in place without pressure from creditors or spiralling costs. The debt solution could be anything from an affordable payment arrangement to insolvency.
A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts).
During the breathing space period, all ongoing liabilities such as rent, utilities, bills and ongoing debt repayments must continue to be paid. It is not a payment holiday and it only prevents the enforcement of debts.
The scheme is overseen by the Insolvency Service who have developed an online service to manage breathing space applications and notify creditors when someone starts a breathing space. They also manage which debt advice agencies can have access to their online service to offer breathing space.
If you are struggling to cope with debt, help and support is available. Although Warrington Housing Association cannot set up breathing space directly, you can email us at firstname.lastname@example.org to arrange a call with our Money Advice Officer, Steven, who can advise on suitable options and signpost you to an organisation that can offer breathing space if this is appropriate.