Family Early Help
Breathing Space for People with Problem Debt
On 4 May 2021, the Governments 'Breathing Space' scheme for people with problem debt came into force.
A breathing space means for 60 days, all creditor action will be paused (including their contact with the person in debt) and interest and any additional charges will be frozen with no more added during that period. The breathing space is to help people to get their finances back on track, with professional advice from a debt advisor or counsellor.
Types of Breathing Space
There are two types of breathing space:
- a standard 60 day breathing space
- an enhanced breathing space for people in mental health crisis treatment
The enhanced breathing space people in mental health crisis treatment lasts for the duration of their treatment plus a further 30 days, no matter how long the treatment lasts.
Applying for a Breathing Space
Standard Breathing Space
The standard breathing space can only be started by a professional debt advisor or by the local authority (where they provide debt advice to residents).
If you are working with a family with problem debt who might benefit from this breathing space, contact one of the debt advice services listed in this Guidebook section (see tabs on the left).
If the parent or carer is a Council tenant, you could also contact the Debt Advisors in Camden's in-house Welfare Rights service, who can also activate a breathing space (contact details on the tab on the left).
Enhanced Breathing Space
The enhanced breathing space gives an alternative route to the protections so that people in mental health crisis do not have to access debt advice first.
In addition to the debtor, the following people can apply to a debt adviser on behalf of a debtor for a mental health crisis breathing space:
- any debtor receiving mental health crisis treatment
- the debtor’s carer
- Approved Mental Health Professionals
- care co-ordinators appointed for the debtor
- mental health nurses
- social workers
- independent mental health advocates or mental capacity advocates appointed for the debtor
- a debtor’s representative
If you are working with a family where a family member is in mental health crisis and has problem debt, you could consider speaking to their health professional about applying for a mental health crisis breathing space, or you could ask the family if you can be their representative and apply to a debt advice service on their behalf.
Eligibility for a Breathing Space
Before a debt adviser can start the breathing space, they must confirm their client is eligible and meets all the conditions. These are that the debtor must:
- be an individual
- owe a qualifying debt to a creditor
- live or usually reside in England or Wales
- not have a debt relief order (DRO), an individual voluntary arrangement (IVA), an interim order, or be an undischarged bankrupt at the time they apply
- not already have a breathing space or have had a standard breathing space in the last 12 months at the time they apply
The debt adviser must also be satisfied that their client meets both of the following conditions:
- their client cannot, or is unlikely to be able to, repay all or some of their debt
- a breathing space is appropriate for their client
For an enhanced breathing space, the individual must also be receiving mental health crisis treatment at the time that an application is made. There is no limit to how many times a debtor can enter a mental health crisis breathing space.
Find Out More About Debt Breathing Space
You can read more about the debt breathing space here