Debt Respite Scheme - Breathing Space

The Breathing Space scheme provides legal protections from creditor action while those affected receive professional debt advice in order to find an appropriate solution to their debts.

The breathing space scheme has a 60-day respite period during which individuals will be protected from almost all enforcement action by creditors whilst working with a debt advice agency. The scheme applies to almost all personal debts including personal and payday loans, overdrafts, utility bills, rent and mortgages arrears, credit and store cards as well a wide range of debts owed to the government. The use of the scheme will help prevent debts from continuing to spiral by stopping the accrual of contractual interest, default interest, fees and charges during the breathing space period.

The same measures apply to certain vulnerable individuals in mental health crisis treatment with no strict time limits until after the customer has recovered from their mental health crisis.

The scheme is administered by the Insolvency Service in England and Wales. Scotland already has its own Debt Arrangement Scheme in place, and Northern Ireland is currently not included in this change.

A new Statutory Debt Repayment Plan will also be launched in 2024 but this is not covered by the equality impact assessment.