The UK government’s Breathing Space Scheme, officially the Debt Respite Scheme, is a way residents of England and Wales* can gain up to 60 days of ‘breathing space’ on many of their debts. During a breathing Space period you would not be liable for interest, court action or late fees. It was designed to take the stress off people who are struggling to pay their bills, and to allow them to deal with their debts in a calm and well-advised manner. It is not a payment holiday, though. You should keep making regular payments even if you are granted breathing Space, if you can afford to do so.
*Note that residents of Scotland have access to a similar scheme, called the moratorium Period. The Moratorium Period has different benefits and terms, and the guidance provided here does not apply in Scotland. More information on that programme can be found here.
When does the Breathing space Scheme come into effect?
The Debt Respite Scheme is already available to residents of England and Wales. It came into effect form the 4th of May 2021.
How can I apply for Breathing Space?
You’ll have to meet certain eligibility checks first. You’ll initiate the process by speaking to a qualified debt advisor, such as the Citizens Advice Bureaux. Anyone who feels that they are unlikely to be able to pay their debts can apply to such an advisor.
What types of debts can qualify for Breathing Space?
Most unsecured debts can qualify, such as:
- Arrears of rent or mortgage
- Arrears of utility bills
- Bank overdrafts
- Personal loans
- Pay day loans
- Credit cards
- Store credit
- Most tax debts
- Most benefits debts
However, secured debts and new debts incurred during a Breathing Space period do not qualify for Breathing Space. If you are unsure if your debts qualify, you should speak to a debt advisor.
Who can use the Breathing Space scheme?
Breathing Space / The Debt Respite Scheme is intended for people who cannot immediately pay their debts and/or for people receiving treatment for a mental health crisis. If someone could meet all of their debt commitments with advice and budgeting, or by selling assets which they are entitled to sell, they should not be granted breathing space. Finally, if someone can renegotiate or restructure their debts so that they can make the payments straight away, breathing Space is not the right solution.
Debt advisors should put clients through for breathing space if:
- They are individuals (not a company or organisation)
- The debt owed qualifies
- The debtor usually resides in Wales or England
Debt advisors should not put clients through for Breathing Space if they:
- Are currently benefitting from Breathing Space
- Have begun receiving Breathing Space in the last 12 months before applying*
- Are currently an undischarged bankrupt
- Currently have an interim order, an individual voluntary arrangement or a debt relief order in place
- Can, or are likely to be able to repay all or some of their debts
- If the advisor feels Breathing Space is inappropriate for any other reason
*Note that Mental Health Breathing Space can be granted any number of times, and can be issued even if a standard or Mental Health Breathing space has been granted within the last 12 months.
Can someone other than a debtor access Breathing Space through a debt advisor?
Typically, the debtor themselves is expected to speak to the debt advisor. However, in some circumstances others can access the Debt Respite Scheme on their behalf. For example, ‘mental health breathing space’ can be sought either by a debtor themselves or by:
- Care co-ordinators, mental capacity advocates or mental health advocates who have been duly appointed for the debtor
- Carers for debtors experiencing a mental health crisis
- Certain approved mental health professionals
- Legal representatives of the debtor
- Mental health nurses
- Social workers
What information will my debt advisor need before putting me forward for Breathing Space / the Debt Respite Scheme?
Your debt advisor will need to know:
- Your full name
- Your date of birth
- Your usual residential address*
- Details like the type and amounts of debts you owe
- The contact details for any agents appointed by your creditors, if applicable
*Note that this information may be withheld from creditors and the official breathing space register in certain limited circumstances
Debtors who are sole traders must also inform their debt advisor of:
- Any trading names they are using or have used in the past
- Any business addresses they are using or have used in the past
Lastly, you should also inform your debt advisor about:
- Recently changed names or addresses
- Any details relevant to the debts in question (credit card numbers, your National Insurance number, etc.)