Getting ‘breathing space’ from your debts
If you’re struggling to pay your debts when they become due, you may be eligible for the ‘breathing space’ scheme. Roni Marsh, Money Advice Team leader, explains how it works.
What is ‘Breathing Space’?
Breathing Space is a government scheme that gives a respite period to people who are in rent or mortgage arrears or who owe certain other debts such as utility bills/council tax/credit cards. There are two types of breathing space: a standard breathing space and a mental health crisis breathing space.
How do I know if I’m eligible for Breathing Space?
In order to be eligible for breathing space you generally need to fulfil the following criteria:
- Live in England or Wales
- Not be subject of debt relief order, bankruptcy or IVA
- Not had a breathing space period in the last 12 months (not relevant if applying for Mental Health Crisis Breathing Space)
- Be unable to pay some or all of your debts as they fall due
How does it work?
Breathing space is not a payment holiday, and you need to pay your rent/mortgage as it falls due. However, it does give you time to increase your income and take advice on your situation. During the period the Breathing Space Moratorium applies:
- Lenders cannot demand payment of arrears or charge interest on debts included in the Breathing Space Moratorium
- Landlords cannot serve a notice seeking possession based on rent arrears; however it’s important to remember that they can serve a section 21 notice or serve notices not related to rent arrears
- Landlords and lenders should not issue claims for possession, for mortgage or rent arrears
- If landlords or lenders have already started possession proceedings, they should inform the court. The court should not generally list for hearings or allow enforcement of court orders until after the Breathing Space Moratorium ends
How long does breathing space last?
For a standard breathing space (available to anyone with problem debt), it gives legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts.
A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts).
How do I apply for breathing space?
If you are eligible for the scheme, you will need to be put into the Standard Breathing Space scheme by a regulated or Council debt adviser. Our Money Advice team can do this for you. Please be aware that our advisers may decide that applying for breathing space is not appropriate in your specific circumstances, in which case other advice will be given.
If you are eligible and are also receiving mental health crisis treatment, the following people can request that a regulated or Council money adviser applies for the mental health crisis breathing space on your behalf:
- a qualified debt adviser
- your carer
- approved Mental Health Professionals
- care co-ordinators appointed for you
- mental health nurses
- social workers
- your independent mental health advocates or mental capacity advocates
- your representative
If you live in Wandsworth or Croydon, and have rent or mortgage arrears, you can also contact our Crisis Navigation team for help here.