Have you heard of the Government’s Breathing Space Scheme?
In May 2021, the UK Government introduced a scheme that basically gives you a break from the anxiety and stress of being in debt. Officially termed as the “Debt Respite Scheme,” the program provides a temporary shield against creditors and legal action, granting individuals the opportunity to stabilise their finances.
The Breathing Space initiative is a crucial part of the UK’s approach to helping people manage debt more effectively. It offers two types of respite, standard breathing space and mental health crisis breathing space. Both designed to prevent creditors from taking action while the scheme is in force.
Standard Breathing Space: This option provides legal protection from debt collection for up to 60 days, including a freeze on most interest and penalty charges. It’s available to anyone with qualifying debts, provided they are working with a professional debt advisor.
Mental Health Crisis Breathing Space: Remarkably, this version extends further support to those undergoing mental health treatment. The protection lasts as long as the individual’s mental health crisis treatment, plus 30 days afterward, regardless of the length of the treatment.
Benefits of the scheme include a creditor halt, where creditors are prevented from making contact or taking enforcement action, a freeze on the interest and charges owed and access to professional debt advice to create a long-term debt solution plan.
To qualify for the Breathing Space scheme, you must be living in England or Wales, must not have used the Breathing Space scheme within the last 12 months and you must not be undergoing bankruptcy proceedings. Your application also must be made through a debt advisor.
Application for the Breathing Space scheme cannot be done individually and involves working with an authorised debt advisor or a charity that provides free debt advice (check out our resources page) who can assess your financial situation to confirm that the scheme is appropriate. If suitable, the advisor will apply on your behalf to the Insolvency Service.
The Breathing Space scheme is a vital tool for individuals facing financial distress, providing a window of opportunity to regroup and plan without the pressure of creditors. By taking advantage of this scheme, those in debt can take significant steps toward financial recovery and stability.