Breathing Space launches May 4.
From Tuesday May 4 new debt respite schemes will come into effect in England and Wales.
A Citizens Advice initiative, Breathing Space is a new scheme that gives people temporary protection from most types of debt collection while they take action to get on top of their debts.
You can apply through a debt adviser for sixty days’ Breathing Space. You must continue to engage with your debt adviser and not take out any new borrowing over £500 in this time. You’ll also have to continue to make certain types of payments, including ongoing housing costs, utility bills, and taxes.
Interest and fees will be paused on debts included in Breathing Space while these conditions are met. You can only apply for Breathing Space once in a 12-month period. The coronavirus pandemic has had a huge impact on lots of people’s finances, with millions falling behind on essential bills and getting into debt. With temporary protections on debt coming to an end, we’re worried that the real struggle will soon begin for many.
If you have unmanageable debts, the new scheme could give you the time to get the advice that will help, and to start taking action. Breathing Space isn’t a temporary fix to simply keep your creditors at arm’s length. You’ll need to work with your debt adviser to try and make a plan to deal with your debts.
For anyone who feels they can’t manage their debt, the most important thing is to seek help as soon as possible from a free and impartial debt advice charity like Citizens Advice. If you’re being treated for a mental health crisis, a separate scheme applies.
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An approved mental health professional will need to confirm you are receiving crisis care. Your GP can’t make this confirmation, but should be able to refer you to someone who can. You can then seek help from the scheme yourself, or someone else – for example a carer, social worker, or mental health nurse – could apply on your behalf.
The pause on enforcement lasts as long as you’re receiving crisis treatment, plus 30 days. A nominated person will need to keep in touch with your debt adviser to update them about your ongoing treatment. However, you won’t need to receive debt advice or meet any ongoing requirements listed above.
You can apply for this type of Breathing Space more than once a year. If you still need more time to tackle your debts once your crisis treatment is over, you can still apply for standard Breathing Space afterwards.
For both types of Breathing Space, you’ll need to live in England or Wales and not currently be in another formal debt solution – like a Debt Relief Order, Individual Voluntary Arrangement, or bankruptcy. You’ll also need to owe at least one qualifying debt.
These qualifying debts are quite broad and include things like credit cards, personal loans, or overdrafts. Many priority debts, such as rent arrears, fuel arrears and council tax arrears will also qualify.
Some debts won’t qualify for Breathing Space. These include court fines, Universal Credit advance payments and student loans. Secured debts like mortgages or car finance won’t qualify unless you’ve fallen into arrears on your payments.
A debt adviser will ultimately advise on whether Breathing Space is suitable for you while you identify a longer-term debt solution. Most common types of problem debt would be qualifying debts in Breathing Space.
This includes priority debts – like rent arrears or council tax debt – that can have particularly severe consequences when you can’t pay them. Your debt adviser will work with you to find the best way forward.
That might involve applying for Breathing Space to buy some time while you choose the right debt solution to fit your circumstances and there is no need to pay for debt advice in Salford, Greater Manchester.
To speak about any money or debt worries you have just call on 0808 27 87 802 or visit the website www.salfordcab.org.uk.
This Article firstly Publish on www.inyourarea.co.uk