We launched Breathing Space yesterday, a scheme designed to help up to 700,000 people struggling with debt problems. The scheme will give those facing financial difficulties the wiggle room they need to receive debt advice, or mental health crisis treatment, without pressure from creditors or mounting debts.
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.
And 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.
Breathing Space can be accessed by contacting a professional debt advisor. Given this may not be possible for someone in mental health crisis treatment, an approved mental health professional can certify they are receiving treatment and then a debt advice provider can consider whether they are eligible for the scheme.
Back in my social justice policy days, this was something I advocated for, and I know it will help give people some space to get back on their feet.
It also builds on the Government's other work to alleviate problem debt through 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.
