As of May 4th 2021, the Debt Respite Scheme (better known as Breathing Space) came into effect, this service allows people in problem debt the right to legal protection from creditor action, by providing time to get advice and find a possible solution to the problem.
What IS ‘Breathing Space’?
There are actually two types of ‘breathing space’:
Standard Breathing Space
The standard Breathing Space service can be used by any person who fits the criteria.
It provides legal protection from creditors for up to 60 days, it freezes all interest and charges, and can even stop baillif action.
However, you can only be in Breathing Space once per year.
Mental Health Breathing Space
The Mental Health Crisis Breathing Space service can be used by those receiving Mental Health Crisis treatment.
It provides stronger than the standard levels of protection from creditors for up to 30 days after the end of the treatment (length of treatment +30 days), it freezes all interest and charges, and can even stop baillif action.
This can entered into as often as needed.
How Does ‘Breathing Space’ Work?
- If you are struggling with serious debts – which in this case is defined as falling seriously behind on payments or having utilities disconnected within the past year – you can be given up to 60 days without fees, charges, interest or bailiff action, in which you can try to get back on top of your finances before your debts spiral out of control.
- During this time you must engage with professional debt advisers – this means from an FCA authorised company – such as the team here at Debt Assist, so that you can find a long-term solution to your debts.
- There is no charge for the Breathing Space service.
- All priority bills must still be paid. This includes, mortgage, rent, insurance, utilities, taxes, etc.
- Further credit (exceeding £500) cannot be taken.
- It is not a ‘payment holiday’ it is a serious tool which must be used to get help and advice