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Debt Respite Scheme “Breathing Space”

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We do not provide this solution ourselves. The information is being provided to assist a reader in considering their options. It provides information about an alternative debt solution

If this option is selected by an individual to address their own debt problems, we direct them (with their specific consent) to a suitably qualified organisation that provides the selected option

We provide Individual Voluntary Arrangements

What is it?

As long as you live in England or Wales, this scheme is available to provide you with temporary protection for up to 60 days from creditor recovery action against you.

During the 60 days of breathing space creditors may not:

  • Contact you about your debts
  • Add interest or charges to your debt
  • Take any enforcement action against you

The period of 60 days may even be longer if you can evidence that you are getting mental health crisis treatment. The period is then extended to cover the duration of your treatment + 30 days.

Essentially, this is to provide you time to get over whatever sudden circumstances you are currently facing, or obtain another method of debt relief in place. You must still pay your creditors while using the DRS.

Part way through the DRS, your Debt Advisor may ask for a review between days 25 and 30 to ensure that you are still complying with it.

Qualifying Criteria

You must:
Be an individual
Live in England or Wales
Owe a qualifying Debt to a creditor

– usually an unsecured debt

– but excludes debts that have / are

  • Secured debts
  • arisen from fraud or a fraudulent breach of trust,
  • court fines
  • confiscation orders
  • child maintenance or obligations made under a court order in family proceedings
  • crisis loans from the social fund
  • student loans
  • damages owed to others for death or personal injury
  • advanced payments of Universal Credit
  • council tax liabilities that have not yet fallen due

You cannot:
Have an existing Debt Relief Order
Have an Individual Voluntary Arrangement
Be an undischarged bankrupt
Be in an existing Breathing Space scheme
Have used a Breathing Space scheme in the last 12 months, unless it was for a mental health crisis
Only have debt that relates to your sole tradership or partnership business

How it Can Happen

You contact a Debt Advisor who is authorised to make an application to the Insolvency Service on your behalf. You cannot make the application directly yourself.

Your name and address (address can be hidden from view in the event that the person is at risk of violence) are shown on a private register. Your creditors will be notified that the Breathing space has started.

Costs to You

The official Breathing Space application is free of charge. But the Debt Advisor may charge for their services in administering it.

Advantages

  • Very quick to instigate
  • Cost effective
  • Interest and charges are frozen during the period

Disadvantages

  • Does not resolve a core debt problem
  • You have to keep on paying your debts
  • It does not write off any unaffordable debt