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What Is The Breathing Space Scheme?

The breathing space scheme, also known officially as the debt respite scheme, is a Government scheme which has been set up and designed to help consumers who are struggling and are under financial pressure from their creditors.

The breathing space scheme looks to give people in this situation a little extra time to repay their debts and provide extra protection from creditors who may be chasing them or charging additional fees. The breathing space debt scheme has been set up to provide people with a temporary break from their payments and get debt advice which then allows them to set up and find the right debt solution. The breathing space debt scheme includes:

  • Freezing interest, fees and charges on debts
  • Pausing the majority of enforcement action and contact from creditors

The breathing space debt respite scheme is designed to be a short-term option to give you the time and space which is needed to engage with debt advice and allow you to find a better- manageable long-term solution, without pressure or hassle from external parties.

How Can I Use The Breathing Space Scheme?

Breathing Space is an application and as such, not everybody is eligible; checks will be made to ensure it is right for you.

If you are successful, Breathing Space will give you a 60-day respite and in that time, your creditors won’t be able to add interest or fees to your debts, or take enforcement action.

It is important to understand, Breathing Space is not a payment holiday, so you’ll have to continue paying your debts during this time, but it does prevent action from being taken against you if you’re unable to pay.

There is a separate scheme available if you a currently in a mental health crisis.  If an approved mental health professional confirms you are receiving crisis care, an application may be made to pause enforcement action for as long as you are receiving care, plus 30 days.

The Mental Health Crisis Breathing Space can be applied for more than once in a 12-month period, and a standard Breathing Space may still be applied for once the crisis is over, should this be required.

What Do I Need To Do During A Breathing Space Agreement?

The breathing space scheme is designed to give you a pressure-free environment in a set time period for you to get advice and look at possible debt solutions. To keep receiving the benefits of the breathing space scheme, you must continue communications with your debt adviser, who will arrange a mid-way review with you between the 25th and 35th day of your breathing space scheme arrangement to confirm that you are actively engaging with the advice that has been provided to you and that you are meeting the conditions of a breathing space agreement. These are:

  • You must inform your adviser if you have experienced any changes in your circumstances
  • You’re not taking out extra borrowing exceeding £500, either individually or jointly, which includes overdraft
  • Are continuing to pay your essential bills and any additional debts which aren’t covered by the breathing space scheme

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What Debts Qualify For The Breathing Space Scheme?

There are a number of personal debt types which qualify for the breathing space scheme, including:

img Credit and store cards

img Personal loans

img Payday loans

img Overdrafts

img Mortgage and utility bill arrears

img Majority of government debts, including tax and benefits

img Council tax arrears

There are joint debts, such as a joint mortgage, which qualify for the breathing space scheme even if only one person wants to apply. However, if it is possible, we recommend speaking to the person who is jointly responsible for the debt and let them know that you are applying for breathing space.

Are There Debts Which Aren’t Eligible For Breathing Space?

There are some debts which don’t qualify for the breathing space scheme, including:

img Court fines

img Student loans

img Advance payments for Universal Credit

img Debts as the result of fraud

img Child Maintenance Payments

What Is The Eligibility Criteria For The Breathing Space Scheme?

To be eligible for the breathing space scheme, you must:

  • Live in England or Wales
  • Owe at least one of the qualifying debts to a creditor

You mustn’t:

  • Be on a debt relief order (DRO)
  • Been on the breathing space scheme in the past 12 months (not including the mental health crisis breathing space scheme)
  • Be subject to an interim order
  • Be an undischarged bankrupt

Find Out More About Our Breathing Space Scheme

This is a type of Breathing Space scheme for those who are suffering from a mental health issue. If the client is receiving treatment for their mental health then they may be able to get an extension when they apply for Breathing Space.

To apply for this type of Breathing Space extension, the client must speak with the debt advisor. To be eligible for this type, you need to live in England or Wales, you can’t afford to pay off your debts, and you are receiving treatment for your mental health. You also need to
provide proof that you are receiving treatment for your mental health.

There are several people who can apply for your mental health Breathing Space scheme on
your behalf. This includes; a carer, approved mental health professionals, care coordinators, independent mental health advocates, independent mental capacity advocates, mental health nurses, psychologists and occupational therapists.

Breathing Space still requires payment during the 60-day period however, you are free from any enforcement action during this period. This includes protection from bailiffs. During the 60 days, it is advised that you try to pay off your debts as much as possible. It is also advised you speak to a debt advisor to see what other options are available for you to consider.

Once you apply for Breathing Space and it has been put into action, bailiffs cannot take any
of your possessions during this period. However, if bailiffs have managed to take away the
client’s possessions before the Breathing Space scheme began, they are allowed to sell
these items. They cannot charge you for the cost of storage for your items either.

Breathing Space begins the following day when the client’s details are placed on the
Breathing Space register. Usually, the client will receive a notification to say they have been
put onto the Breathing Space register. This will be the day before the Breathing Space
scheme begins. If you have received confirmation via post, it is likely that this is after the
Breathing Space scheme has started. It will also give you information about your qualifying
debt. If there is more than one qualifying debt, you will be notified multiple times.

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Money Helper has replaced the Money Advice Service and brings together the support and services of three government-backed financial guidance providers: the Money Advice Service, the Pensions Advisory Service and Pension Wise.