From Tuesday 4th May, the new Breathing Space and Mental Health Crisis Debt Respite Schemes came 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 take action 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 and not take out any new borrowing over £500 in this time. You’ll also have to 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.
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?
You’ll need to live in England or Wales and not currently be in another formal debt solution. 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. Some debts won’t qualify, such as 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 guide on whether Breathing Space is suitable for you while you identify a longer term debt solution.
You can contact Citizens Advice Sherwood and Newark for information and advice: