Breathing Space. What is it?

breathing space||Breathing space

The government will be introducing an official Breathing Space scheme in May 2021 as part of the Debt Respite Scheme.  This is a positive step in supporting individuals to get control of their debt.

There are 2 types: a standard and a mental health crisis breathing space. This standard breathing space will enable a 60-day period where any enforcement action from creditors will be halted and interest frozen for individuals with problem debt.

This period can literally give the space needed to help individuals focus on what to do next, without the worry of being contacted by creditors demanding payments. Professional debt advice will also be given during this period to help individuals find a long-term solution to any ongoing financial issues.

Those who are receiving mental health crisis treatment may also receive the same protections until their treatment is complete plus another 30 days, highlighting the demonstrable correlation between mental health and debt issues.

So how does an individual access this? For a standard breathing space, it would be via a professional debt adviser, such as StepChange. For a mental health crisis breathing space, it is through a professional debt advisor, with supporting evidence from an Approved Mental Health Professional.

Whilst it is true that lenders have been more understanding during the ongoing coronavirus pandemic, albeit following regulatory pressure, it is a positive step in giving individuals the appropriately named ‘breathing space’. This will enable them to take stock of where they are at and put a plan of action in place, all without further interest and charges being added to their debts.

If you or someone you know are affected by the issues in this article, follow Financielle for further information on financial wellness and join our free community to get some help and support along the way.

By Laura Pomfret on January 31, 2021 / Blog /
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