If you have problem debt, you may want to consider looking into the Breathing Space scheme, which can help give you the time you need to regain control of your finances while taking advantage of the right to legal protections from your creditors.
There are two branches of this scheme available: the standard Breathing Space or a mental health-associated Breathing Space.
The former is available to anyone who has problem debt (1), giving them legal protections from creditor action for a period of up to 60 days. This includes pressing pause on the majority of enforcement action and contact, as well as freezing interest and charges on debts.
Mental health-associated Breathing Space measures are only available to those who are currently receiving treatments for mental health, with stronger protections in place. The scheme lasts for as long as the mental health treatment continues, plus 30 days.
You can apply for the scheme by getting in touch with a debt adviser, although they may decide that it is not an appropriate route for you depending on your situation.
For example, if you have access to funds or income, you may be able to repay what you owe with some budgeting advice and help. As such, Breathing Space would not be the most appropriate solution for you.
To apply for a mental health Breathing Space programme, you do not need to access debt advice first. An approved mental health professional can certify on your behalf that you are receiving treatment and this can then be used by a debt adviser to launch mental health Breathing Space proceedings.
In order to be eligible for Breathing Space, you must be an individual, owe debt to a creditor, live or reside in England or Wales, not have an IVA or a debt relief order in place or be an undischarged bankrupt at the time of application.
Qualifying debts include the likes of credit cards and store cards, personal loans, payday loans, overdrafts, utility bill arrears and mortgage/rent arrears.
Some debts are considered ongoing liabilities during a standard Breathing Space agreement and you will need to continue paying these if you’re able to. These include a mortgage secured against your primary residence, a lease or rental agreement, an insurance agreement, national insurance contributions, local taxes and water, gas and electricity bills.
The main aim of this debt respite scheme is to give you sufficient time to seek out the appropriate debt advice and guidance to help you find a suitable course of action to resolve your debt problems. You will need to continue to engage with your debt adviser over the course of the 60 days and not take on any new debt over £500 during this time.
You are only able to apply for this scheme once in any 12-month period, with interest and fees paused on debts as long as you meet the associated conditions.
If you are struggling with debt at the moment because of cost of living challenges, get in touch with us today to see how we can help.
References:
1. https://www.gov.uk/options-for-paying-off-your-debts/breathing-space
