Breathing Space Scheme

How does breathing space work?

The aim of the breathing space scheme is to give eligible people the time and space they need to deal with their debts without fear of creditor pressure.

If you qualify for breathing space, the process works like this:

• You send your application, either for the standard or mental health crisis breathing space, through an approved debt advice provider
• Your breathing space will start within two days of your application being received
• Creditors will have the opportunity to challenge your breathing space application within the first 20 days
• You can add debts to your breathing space scheme as long as it started before your breathing space began. You will get protection from creditors for every debt you add
• You’ll review your breathing space after 30 days with debt advice providers you’ve been working with

As long as you’re meeting your side of the arrangement and working with your debt advice provider, you should get protection from creditors for a full 60 days.

The breathing space scheme helps you deal with most personal debts, including both secured and unsecured debts.

Am I eligible for breathing space?

Because there are two different versions of the debt respite scheme, the standard breathing space scheme and the mental health breathing space scheme, each has their own distinct qualification criteria.

Standard breathing space scheme

To be eligible for the standard breathing space scheme, you must meet the following criteria:

• You’re not currently involved in a formal debt solution like an Individual Voluntary Arrangement (IVA), Debt Relief Order (DRO), or bankruptcy
• You must be unable to repay your debts ‘as they fall due’ (meaning you can’t pay them on time)
• You must live in England or Wales

Applications to the standard breathing space scheme must be done through an approved debt adviser, who agrees that you need time to get debt advice and you are likely to enter a debt solution if you’re not accepted to the scheme.

Mental health crisis breathing space scheme

In line with the mental health act, people with debts who are also receiving mental health crisis treatment can apply for the mental health breathing space scheme. You must also meet the following criteria:

• Be in crisis treatment whether via a crisis house, crisis home treatment team, community mental health team or have been detained under the Mental Health Act.
• have their completed form submitted to the Mental Health and Money Advice website who will then manage the referral process and if approved will be in touch every 30 days to see whether an extension is required.
• Have your application approved by an Approved Mental Health Professional (AMHP) who will need to complete an evidence form to prove eligibility and suitability for the scheme.

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What are qualifying debts for the breathing space scheme?

The breathing space scheme helps you deal with most personal debts, including both secured and unsecured debts.

Qualifying debt for the breathing space scheme includes:

• Mortgage and rent arrears
• Car loans
• Credit cards and store cards
• Personal loans
• Payday loans
• Unpaid utility bills

Breathing space will also help you deal with Government debts like tax and benefits arrears, as well as unpaid council tax bills.

How will the breathing space scheme impact my life?

Both versions of the breathing space scheme are designed to give you the space you need to deal with your debts, and will hopefully have a positive impact on your life.

Standard breathing space

During standard breathing space, you will have the time you need to seek debt advice and consider various debt solutions as a way to solve your money issues.

You will be in regular contact with a debt adviser throughout your breathing space, and somewhere between day 25 and 35 of the breathing space scheme, an adviser will conduct a review with you to ensure you’re meeting the conditions of the scheme.

As long as you continue to make your debt repayments and cover your essential costs, you will continue to receive protection from creditors for the full 60 days of the scheme.

Mental health crisis treatment breathing space

With the mental health breathing space, the priority is to ensure you work with mental health professionals to get the treatment you need without the added stress of dealing with creditors.

You won’t need to meet the conditions of the standard breathing space scheme, however a mental health professional will need to confirm every 30 days that you’re still receiving active treatments.

Because breathing space isn’t a payment holiday, you will still have to continue to pay your essential bills and make a contribution towards your debts, but will receive creditor protection as long as you’re still receiving treatment.

What happens when breathing space ends?

When breathing space ends, the protections you received from creditors will end too. That means:

• Your creditors can begin contacting you about your debts again
• They will have the option to add fees and charges to the money you owe
• Creditors can also begin the process of seeking legal action against you for underpaid debts

The hope is that, by the time your breathing space ends, you will have worked with a debt adviser to find a longer-term debt solution, whether that’s an IVA, a DRO, or another debt management programme.

Where can I get debt advice on the debt respite scheme?

When you’re struggling to make ends meet, having to deal with creditors pressuring you for money only adds to your stress – especially if you don’t have the money they’re demanding.

At Your Debt Expert, we support people in that situation everyday, offering free initial debt advice as well as long-term debt solutions.

If you’re facing debts you’re struggling to repay, talk to a friendly debt adviser today on 0800 082 8086.