Debtors have right to apply for breathing space to pay

From 4 May 2021 debtors have the right to apply for breathing space to pay their debts.

At Frank G Whitworth we aim to keep our clients and claimants updated on the latest news and legislation changes.

From Tuesday the 4th of May the government has given debtors the right to apply to the local authority or the insolvency service for breathing space to pay their debts. This affects our High Court Enforcement Officer service and our Commercial Rent Arrears Recovery service (CRAR).

This change is under The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, updated 30 April 2021.

The Debt Respite Scheme (Breathing Space) will give someone in problem debt the right to legal protections from their creditors.

There are two types of breathing space:

• standard breathing space
• mental health crisis breathing space

Standard Type Breathing Space

This lasts 60 days and during that time no action can be taken against a debtor once granted. This includes, visits, letters and telephone calls. Also no interest can be charged on the debt during this period.

Mental Health Crisis Breathing Space

This is for debtors who are experiencing a mental health crisis. This type of breathing space will continue for the duration of the person’s treatment, plus 30 days.

A debtor can only apply once for breathing space in 12 months, and must go through the procedure with a Debt Advisor such as Step Change or the Citizens Advice Bureau (CAB).

If a creditor is informed by the insolvency service or by the debtor that they have been entered on the breathing space register it is their legal responsibility to tell the enforcement company immediately. Failure to do so could render them responsible for enforcement charges.

I have a question

Telephone or email Frank G Whitworth for advice.