From May 2021, the new Breathing Space and Mental Health Crisis Debt Respite Schemes come into effect in England and Wales.
What is Breathing Space?
Breathing Space is a new scheme that gives people temporary protection from most types of debt collection while they act to get on top of their debts.
You can apply through a debt adviser for 60 days’ Breathing Space. You must:
- continue to engage with your debt adviser
- not take out any new borrowing over £500 during the 60 days.
- continue to make certain types of payments, including ongoing housing costs, utility bills, and taxes.
Interest and fees will be paused on debts included in Breathing Space while these conditions are met. You can only apply for Breathing Space once in a 12-month period.
Citizens Advice Bassetlaw, said: “The coronavirus pandemic has had a huge impact on lots of people’s finances, with millions falling behind on essential bills and getting into debt. With temporary protections on debt coming to an end, we’re worried that the real struggle will soon begin for many.
“If you have unmanageable debts, the new scheme could give you the time to get the advice that will help, and to start taking action. Breathing Space isn’t a temporary fix to simply keep your creditors at arm’s length. You’ll need to work with your debt adviser to try and make a plan to deal with your debts.
“For anyone who feels they can’t manage their debt, the most important thing is to seek help as soon as possible from a free and impartial debt advice charity like Citizens Advice.”
Are there other types of Breathing Space?
If you’re being treated for a mental health crisis, a separate scheme applies.
Who is eligible for Breathing Space?
For both types of Breathing Space, you’ll need to live in England or Wales and not currently be in another formal debt solution – like a Debt Relief Order, Individual Voluntary Arrangement or bankruptcy. You’ll also need to owe at least one qualifying debt.
These qualifying debts are quite broad and include things like credit cards, personal loans or overdrafts. Many priority debts, such as rent arrears, fuel arrears and council tax arrears will also qualify.
Some debts won’t qualify for Breathing Space. These include court fines, Universal Credit advance payments and student loans. Secured debts like mortgages or car finance won’t qualify unless you’ve fallen into arrears on your payments.
Your debt adviser will ultimately advise on whether Breathing Space is suitable for you while you identify a longer term debt solution.
Contact Citizens Advice Bassetlaw. Their advisers are offering telephone support from Monday to Friday, 10.00am to 2.00pm. Their local numbers are:
- Local number: 01909 498894
- Debt problems: 01909 498890
For all their details, including information about volunteering with them, see www.bassetlawcab.org.uk/.