Breathing space is a government-backed scheme that gives people in England and Wales a period of time where they can’t be chased by their creditors. If you’re struggling with debt repayments, you can get some temporary relief from things like letters and phone calls from debt collectors.
In this guide, we’ll explain what the breathing space scheme is, who is eligible for debt respite under the scheme, and how to apply for breathing space should you qualify.
What is the breathing space debt respite scheme?
The breathing space debt respite scheme is a government-backed solution that aims to provide UK citizens with temporary relief from debts.
Designed to relieve the pressure of dealing with creditors, this scheme can grant individuals a 60-day break from ongoing debt collection and freezes interest or charges for the duration.
Eligible persons over the age of 18 who have qualifying debts can apply for the scheme either through an approved debt adviser, or online. Information about all current and recent breathing spaces will be stored on the Government’s breathing space register.
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Am I eligible for breathing space?
Even if your financial situation looks bleak, the breathing space debt respite scheme can offer you a way out.
The scheme is available to those that live in England or Wales, owe at least one qualifying debt to creditors, and are not undergoing an Individual Voluntary Arrangement, Debt Relief Order, or an active bankruptcy.
If you qualify, you will be given a period of freedom from interest and any form of enforcement activity on outstanding debts, and you’ll have additional time to figure out how best to manage your financial situation.
How to apply for breathing space scheme
To apply for the breathing space scheme, you must be recommended by an approved debt adviser.
This might mean working with a debt charity like StepChange, or engaging the services of an approved debt advice provider.
Be sure to tell your chosen debt adviser all of the details of your debts when asked. If any of your debts are joint with another person, both parties must agree to the application before getting approval.
Your debt adviser will be able to guide you through the breathing space application process, and you can begin your journey towards a more stable financial future.
Qualifying debt for breathing space
For people facing unmanageable debt, the breathing space debt respite scheme can provide a period of calm that allows them the time to formulate a plan of action for dealing with their debts.
A wide variety of unsecured debts qualify for this scheme, including personal loans, utility bills, income tax payments, and credit card debt.
Debts that don’t qualify for breathing space
This scheme is designed to provide a period of relief on debts like credit cards and personal loans. Unfortunately, mist secured debts don’t qualify.
Debts that don’t qualify for the breathing space scheme include:
- Mortgage arrears
- Rent arrears
- Student loans
- Council tax liabilities
- Court fines
- Child maintenance arrears
- Debts incurred after breathing space started
- Debts incurred because of fraud or criminal activity
What is mental health crisis breathing space?
Debt respite scheme for those receiving mental health crisis treatment
The mental health crisis breathing space provides debt respite for people receiving treatment as part of a mental health crisis.
This includes any person referred by an approved mental health adviser, such as a general practitioner or Community Mental Health Team.
Under the breathing space scheme, all creditors must stop recovery action for the duration of the scheme. While this respite does not waive debt obligations, it gives valuable additional time to reflect and from which to plan a strategy for repayment.
Who qualifies for mental health breathing space?
Assessment by an approved mental health professional
Applying for the mental health crisis breathing space scheme is an important step for those struggling with debts. To be eligible, you must meet certain criteria – this could include:
- Assessment by an approved mental health professional
- Being in detention under the Mental Health Act
- Receiving mental health treatment from a community mental health team.
If you believe that you qualify for the breathing space debt respite scheme, it’s best to speak to a qualified debt advice organisation as soon as possible or your local authority as quickly as possible.
Step-by-step guide to breathing space scheme
Get debt advice
The first step is to reach out for assistance from a debt adviser. They will carefully evaluate your circumstances and determine if breathing space could provide some much-needed relief, or if another debt solution may be available to you instead.
Apply for breathing space
If you are eligible and would like to submit an application, the debt adviser can send it on your behalf directly to The Insolvency Service – a government body responsible for managing the Debt Respite Scheme.
Start breathing space scheme
After you’ve submitted your application, your breathing space will begin in a few days’ time – typically within two working days.
For the first 20-day period of the scheme, creditors can lodge any challenge regarding both your approval for breathing space and concerning individual debts that are part of this programme.
Add additional debts to breathing space
It’s still possible to add new debts to the scheme after you start your breathing space period. As long as any debts added already existed prior to the arrangement, you will receive the same protection from creditors for the remaining 60 days.
For example, if a debt is added on day 10 of your breathing space, it would remain protected for 50 days. Any debts incurred after the beginning of your breathing space won’t qualify to be included in this programme.
The 20-day time limit for creditors to dispute the addition of a newly acquired debt is reset each time a new debt is added, however existing debts are still safeguarded from any potential challenge.
30-day review of breathing space
Following a 30-day period, your debt consultant will assess the current state of your finances. Generally speaking, this means that the plan may continue for its full duration of 60 days; however, there are conditions under which breathing space could be cancelled or particular debts excluded from it.
What happens when breathing space ends?
Breathing space will normally come to an end after 60 days, after which you will need to make arrangements to deal with your debts.
You might want to agree to a repayment plan with your creditors, or you could engage the services of a debt solution provider who will deal with creditors on your behalf.
After you have finished your breathing space, if no debt solution is in place, you will be expected to keep making payments on the debts included in your breathing space application, provided that it’s financially possible for you to do so.
Where can I get more advice on How to apply for breathing space: Your guide to accessing debt help and other debt solutions?
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