What you need to know about the Breathing Space debt respite scheme

5 min Read Published: 04 May 2021

What you need to know about the Breathing Space problem debt schemeThe UK government has launched a new scheme to give people struggling with problem debt a 60-day 'breathing space' period, protecting them from further interest and charges while they get on top of their finances.

This article looks at what exactly Breathing Space is, who is eligible, what it covers, and how to apply, making it as simple as possible to determine if it is right for you.

What is the Breathing Space scheme?

Breathing Space is a new debt respite scheme provided by the UK government to help people in England and Wales struggling with mounting debt to get their finances back on track.

It aims to give those grappling with problem debt up to 60 days of legal protection from their creditors, with most interest and penalty charges frozen, and all enforcement action halted.

They will also receive professional guidance from a debt advisor to design a repayment plan to help them organise a solution to their debt problems.

Who is eligible for the Breathing Space scheme?

The Treasury has estimated that as many as 700,000 people are currently struggling to manage their debt and could benefit from the Breathing Space scheme. It is open to anyone struggling to repay their debt in England or Wales from 4 May 2021. Those unsure whether or not they qualify for Breathing Space can contact a professional debt advisor to find out if they are eligible.

Which debts does the Breathing Space scheme cover?

According to the GOV.UK website, "most" debts qualify for the Breathing Space scheme, including:

  • credit cards
  • store cards
  • personal loans
  • payday loans
  • overdrafts
  • utility bills
  • rent and mortgage arrears
  • government debts like tax and benefits

How does Breathing Space support those undergoing mental health treatment?

For those receiving treatment for a mental health crisis, the 60 days of protection provided by the standard Breathing Space scheme will be extended to cover the full duration of their crisis treatment, and an additional 30 days once it has concluded.

It is acknowledged that someone undergoing mental health crisis treatment may not be able to arrange this by themselves, so it is possible for an approved mental health professional to certify that they are receiving treatment. They can then contact a professional debt adviser on the individual's behalf to consider if they are eligible for Breathing Space and begin the application process.

The support for those suffering from mental illness follows a number of changes that the government is pursuing to alleviate the mental health issues surrounding problem debt, including new rules to make debt arrears letters less daunting, piloting a no-interest loan scheme, and raising the minimum financial threshold for people to enter a Debt Relief Order.

For more information on the link between money and mental health, and some useful links if you need help, visit our article "The impact of debt on your mental health and how to get help".

How do I apply for the Breathing Space scheme?

The standard version of Breathing Space can be accessed by contacting a professional debt advisor, who can determine if you are eligible for the scheme and initiate your application.

For those undergoing mental health crisis treatment, a mental health professional involved in your care can certify that you are receiving treatment and pass on the application to a professional debt advisor on your behalf.

Further information on the Breathing Space scheme

It is important to note that, although interest and fees are frozen, the Breathing Space scheme should not be treated like a payment holiday.

People using Breathing Space will need to keep paying any debts and ongoing liabilities they have - such as their mortgage, rent and bills - whilst they work alongside a professional debt advisor to find a sustainable debt solution. If someone in a standard Breathing Space fails to comply with these obligations, then their debt adviser has the discretion to withdraw their Breathing Space.

For further advice on how to tackle debt, try our articles "Where to get free debt advice" and "The simple tricks to repay debt quicker".