Breathing Space scheme for people with problem debt

Posted 10.05.2021

According to the charity Step Change, around 700,000 people struggling with problem debt could benefit from Breathing Space this year.  The Breathing Space scheme will give those facing financial difficulties 60 days to get finances back on track – without debts piling up, worrying letters or enforcement action.  People in crisis will also have access to professional debt advice, with stronger protections for people 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. They will also receive professional debt advice to design a plan which helps to get their finances back on track.

Recognising the link between problem debt and mental health issues, these protections will be available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days.

John Glen, Economic Secretary to the Treasury  “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 advisor”.

The announcement builds on other recent government work to alleviate problem debt – and the associated mental health problems – including introducing new rules to make debt letters less threatening, funding a no-interest loan pilot, maintaining record levels of debt advice funding for the Money and Pensions Service in 2021-22 and looking at raising the financial threshold criteria for individuals to enter a Debt Relief Order.

Building Better Opportunities’ Money Sorted in D2N2 programme offers 6 months of tailored support for people who need to develop financial literacy skills.  Money Sorted works  to tackle the poverty and social exclusion faced by the most disadvantaged people in Nottingham, Nottinghamshire, Derby and Derbyshire.

BBC news article on Breathing Space

BBO is having a significant impact on individual lives, supporting people to increase their confidence, independence and achieve their employment aspirations.

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