Breathing Space
Breathing space is a government scheme which is designed to give you time to receive debt advice and find a solution to sort out your debt problems.
Breathing space will stop most creditors from starting or continuing with enforcement action against you (some types of debt are excluded, click here for a detailed list). The protections you receive will depend on the types of debt you have and the kinds of enforcement action that are being threatened or taken.
The advantages of Breathing Space:
Your creditors cannot add interest or charges to an eligible debt during breathing space.
Your creditors or collection agency cannot contact you to ask for payment towards a debt that has been included in breathing space.
No enforcement action can be taken against you for a debt that has been included in breathing space. You can find more details of what enforcement action can and cannot take place during Breathing Space by clicking here.
Automatically free of debt?
No, breathing space does not clear your debts, but it does stop most action being taken by creditors to collect or enforce debts whilst it is in place. This is to give you time to get advice to resolve your debts.
Length of time?
60 days (may be longer if you have a Mental Health Breathing Space
Is there a fee?
No, Breathing Space is free to enter
Which debts are excluded?
The main exclusions are; Court fines, CSA obligations, student loans, secured debts, damages, personal injury, Social Fund crisis or budgeting loans, Universal Credit advances, fraud, or any debts incurred during or after a Breathing Space.
Impact on assets?
No
Impact on employment?
Entering Breating Space in itself is unliely to have an effect of your employment
Credit rating affected?
Yes
Am I eligible?
To be eligible for Standard Breathing Space you need to meet the following criteria:
must be an individual living or usually residing in England or Wales
must owe at least one qualifying debt to a creditor
must not have a DRO, an IVA, an interim order, or be an undischarged bankrupt
cannot repay all or some of your debts as they fall due
(and for a Standard Breathing Space only) not had Breathing Space in the last 12 months.
In addition to the above, for a Mental Health Breathing Space, you must:
be receiving mental health crisis treatment. Not everyone with mental health problems will qualify, you must be receiving crisis treatment in relation to a “serious mental disorder”
it must be from a specialist mental health service e.g. provided by a crisis home treatment team, a mental health liaison team, a community or specialist mental health crisis team.
How do I apply?
You can only apply for Standard Breathing Space through an approved debt adviser such as Crosslight. Your debt adviser must agree that:
you need time to get debt advice; and
you are likely to be able to enter a debt solution.
What else do I need to know?
During a Standard Breathing Space period you have certain obligations. You must:
inform your adviser if there is any material change in your circumstances
continue to pay any ongoing liabilities as they fall due e.g. rent, council tax, utilities etc
not obtain additional credit that exceeds £500
engage with your adviser in an appropriate way.
Other things to consider
Entering Breathing Space will impact your credit rating. Firms that report to credit reference agencies if payments are received or not can keep doing this during a breathing space. But there should be no automatic effect on your credit file triggered by starting the breathing space, and no automatic flag or code that will stay on your file after Breathing Space has finished
If you have debts which you have not paid or talked to your creditor about for a long time, it might be the case that these debts will soon become “statute barred”. This means the lender has run out of time to make a court claim to recover the debt. It is not clear, at the moment, whether applying for breathing space is treated as an acknowledgement of the debt or not. If it is, your creditor will usually have another six years to start their court claim.
Feeling overwhelmed by debt or money worries?
Speak to one of our a debt advisors.