The Debt Respite Scheme - Breathing Space
What is Breathing Space?
On the 4th of May 2021, the Government launched ‘The Debt Respite Scheme’, more commonly known as ‘Breathing Space’.
The introduction of Breathing Space provided licenced debt advisers the means of applying for a moratorium against creditors, to stop them taking enforcement action against individuals suffering with problem debts.
Breathing Space is designed to give an individual the time they need to find an appropriate debt solution without the threat of creditors taking legal action against them before they can get a solution in place.
There are 2 kinds of Breathing space:
Standard Breathing Space
Available to any individual experiencing problem debt and provides a 60 day pause on most enforcement actions as well as blocking contact from creditors and stopping their ability to charge interest.
Mental Health Breathing Space
Available to an individual who is receiving mental health crisis treatment and largely provides the same protection as the standard Breathing Space, but for as long as the individual is receiving mental health crisis treatment, plus a further 30 days irrespective of the period the treatment lasts.
Since its inception, Breathing Space has helped many thousands of people successfully navigate their way into a sustainable debt solution without having to experience the added stress and anxiety caused by aggressive debt collection technics and enforcement activity by creditors.
How do you apply?
You can only enter Breathing Space if you are struggling to pay your debts. You can apply to enter Breathing Space via any debt advice provider who is authorised by the Financial Conduct Authority (FCA) to give debt counselling, or through a local authority where they provide debt advice to their residents.
IVAorg CIC is authorised by the FCA to provide Breathing Space to our clients should it be needed.
There is no charge to enter Breathing Space.
Before Breathing Space can begin, a thorough eligibility check must be undertaken to ensure that your circumstances fit the required qualifying criteria.
Once it’s been established that Breathing Space is required, then it takes approximately 24 hours to implement.
What Happens During Breathing Space?
During Breathing Space, you are required to communicate with your adviser on a regular basis, keeping them informed of any changes to your circumstances and you must provide relevant documents and information to ensure your debt solution application can be process in a timely manner.
You are expected to maintain your monthly payments and liabilities during Breathing Space as it is not to be seen as a payment holiday, and you are not allowed to take on any further credit above £500 whilst Breathing Space is in place.
In turn, your creditors are unable to continue with or commence any legal action against you for the recovery of their debt and most creditors must freeze interest and charges on any outstanding balance.
How Often Can I Enter Breathing Space?
You are not allowed to enter Breathing Space more than once in a 12 month period.
Breathing Space Register
A register is maintained by the Insolvency Service, the Government’s insolvency department, and a record of each Breathing Space applicant is kept for a period of 15 months. The information held is limited to:
- Name
- Date of birth
- Usual address
- Trading name and address of business if self-employed
- Date Breathing Space started
- Date Breathing Space ended
It is worth noting that it is possible to withhold your address in certain circumstances, for example if it is reasonable to expect that sharing your address might lead to violence against you by someone who normally lives with you.
If you are experiencing problems with your debts and feel that entering Breathing Space will help you to address your financial difficulties, then you can call one of the IVAorg team on 0800 856 8569
We’ll discuss the benefits of Breathing Space with you and help you determine whether it represents the first step in helping you to becoming debt free.
