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Breathing Space Scheme
If you are struggling with debts, the Breathing Space scheme might be able to help you. It gives you some time to find a solution to deal with your debts without worrying about pressure from your creditors. There are no charges for entering Breathing Space.
Types of Breathing Space
There are two kinds of Breathing Space:
- Standard Breathing Space: Available to anyone with problem debt. It gives you legal protection from most creditor actions for up to 60 days. During this time, interest and charges on your debts are usually frozen, and enforcement actions are paused. You can only use standard Breathing Space once every 12 months.
- Mental Health Crisis Breathing Space: If you are receiving mental health treatment, you may qualify for this type of Breathing Space. You will need support from a specialist, who will guide you through the process.
How to Qualify
To get Breathing Space, you must work with an FCA-regulated debt adviser. Our team at Clifford Watts can help you access this service if you live in England or Wales.
Things to Consider Before Applying
Before starting Breathing Space, we will discuss with you whether it is the best option. We may also look at other solutions, such as using your income to pay debts or considering other debt plans.
Debts That Qualify
Most personal debts are covered by Breathing Space, including:
- Credit cards, store cards, personal loans, payday loans
- Overdrafts, mortgage arrears, utility bills
- Council tax and some government debts (like tax and benefit debts)
However, some debts do not qualify, such as:
- Court fines
- Child maintenance payments
- Student loans
What Happens During Breathing Space?
Once you are in Breathing Space, your creditors are informed, and they must pause most actions against you. We will also keep track of your progress and review your situation after about 30 days.
1. Initiating Breathing Space:
Standard Breathing Space:
- Eligibility Check: A debtor must consult a debt adviser who will check eligibility (e.g., residency in England or Wales, no current insolvency proceedings).
- Application by Debt Adviser: If deemed eligible, a debt adviser starts the breathing space and adds the debtor's details to the breathing space register.
Mental Health Crisis Breathing Space:
- Mental Health Certification: An Approved Mental Health Professional (AMHP) certifies that the debtor is undergoing mental health crisis treatment.
- Initiation by Debt Adviser: Using AMHP evidence, a debt adviser starts the mental health crisis breathing space, which continues for the duration of the treatment plus 30 days.
2. Notifications to Creditors:
- Creditors receive a notification (electronically or by post) informing them of the start of the breathing space, including details of the qualifying debts.
- Creditors must stop all enforcement action, interest accrual, and contact regarding the breathing space debt.
3. During Breathing Space:
Creditor Actions:
- Stop all enforcement and recovery actions.
- Halt all communication requesting payments, except as allowed (e.g., communication under the Consumer Credit Act).
- Identify any additional debts owed by the debtor and notify the debt adviser.
Your Actions:
- Continue paying ongoing liabilities (e.g., mortgage, utility bills) to avoid cancellation.
- Communicate with the debt adviser for reviews.
4. Midway Review (Standard Breathing Space Only):
Debt Adviser Review: Between day 25-35, the debt adviser reviews compliance:
- Continued Compliance: The breathing space continues.
- Non-Compliance: The breathing space can be cancelled for some or all debts.
5. Ending Breathing Space:
Standard Breathing Space: Ends after 60 days, or upon cancellation by a debt adviser or court.
Mental Health Crisis Breathing Space: Ends 30 days after the end of mental health crisis treatment or upon cancellation.
6. After Breathing Space Ends:
Creditors can resume applying interest, fees, and taking enforcement actions, provided the debtor has not entered another formal debt solution.
Our Commitment
We are here to help you understand the pros and cons of Breathing Space. In some situations, moving directly to a debt solution might be better for you, and we will help you decide what is best.