Breathing Space, a UK scheme to help people in problem debt launched May 2021

Hundreds of thousands of people struggling with debt problems will be supported through a new debt respite scheme that launched on May 4th 2021.

The Government scheme gives people 60 days to get finances back on track, without debts piling up, worrying letters or enforcement action. People will also have access to professional debt advice, with stronger protections for people in mental health crisis treatment. The Government scheme is called “Breathing Space” and gives those facing financial difficulties space to receive debt advice, or mental health treatment, without pressure from creditors or mounting debts.

People are given legal protection from their creditors for 60 days, with interest and penalty charges frozen, and enforcement actions halted. They can also receive professional debt advice to design a plan which helps to get their finances back on track. These protections will be available for people in mental health crisis treatment, for the full duration of their treatment plus another 30 days. This clearly recognises the impact that debt has upon mental health. The UK Government expects 700,000 people to benefit in the first year of the scheme. The scheme also recognises that it is incredibly hard to get your finances back on track when your debts are piling up and you’ve got creditors at the door. It gives people a breathing space from charges, distressing letters and bailiff visits, so they can tackle their problem debt.

The standard Breathing Space can be accessed by contacting Bennett Jones. The announcement builds on other recent government work to alleviate problem debt including introducing:

  • New rules to make debt letters less threatening
  • Funding a no-interest loan pilot
  • Maintaining record levels of debt advice funding for the Money and Pensions Service in 2021-22
  • Looking at raising the financial threshold criteria for individuals to enter a Debt Relief Order.

Debt is far more than just a financial issue. It’s a major cause of relationship breakdown, can hugely diminish people’s well-being, and sadly leaves 100,000s at risk of taking their own lives. That’s why Breathing Space is so important. It’s a win-win-win; for individuals who get their finances back on track, creditors who’ll recoup more cash in the long run, and the economy as there will be less financial catastrophe.

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