Breathing Space

The Debt Respite Scheme or Breathing Space legislation has now came into effect as of May 2021, This legislation aims to help those who are in debt to secure a period of time pausing most enforcement and contact from creditors, this includes no interest or charges on effected debt

There are 2 types of breathing space:

  1. Standard – Max 60 Days
  2. Mental Health – 30 Days after treatment ends to those who are receiving mental health treatment

Both an Financial Conduct Authority (FCA) authorised advice provider and local authorities can grant a breathing space, only doing so if they feel that the individual can not afford to pay back the debt and that it is the right solution. Once a breathing space is granted names will be added to a database and creditors informed via notification by either post or email

This will effect landlords and agents as the types of restricted enforcement include Section 8 notices, interest, pre paid meter installation and possession warrants. This will include issuing Section 8 (but not Section 21) during this time period, as a creditor you will need to inform the court about a breathing space if your case if scheduled during this time

Creditors must not contact a debtor in relation to any debt collection or payment but can contact the debtors debt advisor to discuss any debt solutions or reply to any queries from the debtor if they have made contact.

Don’t be mistaken this is not a payment holiday, debtors are legally bound to pay their debts and should continue to make scheduled payments during their breathing space. What the creditor can not do is apply financial penalties or any other form of action in regards to a debt

Overall this will give those who are financially struggling a fair and reasonable time frame to seek advice and find the means to clear their debts. It does mean agents and landlords will need to review their processes over the ongoing months to allow for the process to be effective.

Read the full government guidelines
https://www.gov.uk/government/publications/debt-respite-scheme-breathing-space-guidance/debt-respite-scheme-breathing-space-guidance-for-creditors

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