HM Treasury has launched a scheme which will give those facing financial difficulties 60 days to get their finances back on track.
The Breathing Space scheme will also give those taking part access to professional debt advice, with stronger protections for those in mental health crisis treatment.
Under the scheme, people will be given legal protections from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted.
Those in mental health crisis treatment will receive these protections for the full duration of their crisis treatment plus another 30 days.
The scheme can be accessed by contacting a professional debt adviser, while approved mental health professionals will certify if someone is receiving treatment.
John Glen, economic secretary to the Treasury, said: “We’re determined to tackle problem debt, but it is incredibly hard to get your finances back on track when your debts are piling up and you’ve got creditors at the door.
“This scheme will give people a breathing space from charges, distressing letters and bailiff visits, so they can tackle their problem debt with support from a professional debt adviser.”
The Treasury expects the scheme to also benefit creditors, with more than £400m in extra debt repayments expected in the first year of the scheme, as people are supported to get their payments back on track.
Joanna Elson, chief executive of the Money Advice Trust which runs National Debtline, said: “We are pleased to be supporting the launch of the Breathing Space scheme, which is a major milestone in improving the help available to people struggling with debt.
“Breathing Space will provide a powerful incentive for people in debt to seek free debt advice – with vital protections from interest, charges and creditor action to give people the time and space they need to begin to deal with their financial difficulty.
“Free debt advice has never been more important than in helping households to recover from the impact of Covid-19 – and Breathing Space will strengthen our ability to help people at this crucial time. We look forward to playing our role in making the scheme a success.”
This Article firstly Publish on www.ftadviser.com