What’s The Debt Respite Scheme Breathing Space?

Sam Wooller, Customer Experience Communications Manager, Tuesday, 4 May 2021
Updated: Monday, 18 September 2023

On 04 May 2021, HM Treasury created a new scheme to encourage people with ‘problem debt’* to access professional debt advice. The Debt Respite Scheme (also known as Breathing Space) gives individuals time to seek advice and find an effective solution to dealing with their debt, without the worry of being chased for payment or incurring extra charges while they do that.

*Problem debt is where someone is struggling to repay the money they owe to their creditors (for example, Moneybarn).

On 04 May 2021, HM Treasury created a new scheme to encourage people with ‘problem debt’* to access professional debt advice. The Debt Respite Scheme (also known as Breathing Space) gives individuals time to seek advice and find an effective solution to dealing with their debt, without the worry of being chased for payment or incurring extra charges while they do that.

*Problem debt is where someone is struggling to repay the money they owe to their creditors (for example, Moneybarn).

Types of Breathing Space

There are two types of breathing space:

  • A standard breathing space: Available to anyone with problem debt, this form of breathing space provides individuals with temporary ‘legal protections’ from creditor action for up to 60 days. Protections range from freezing most interest and charges on their debt, to pausing contact from creditors and putting a hold on any enforcement action.
  • A mental health crisis breathing space: This form of breathing space is available for individuals receiving mental health crisis treatment and can only be applied for with an Approved Mental Health Professional (AMPH). Alongside stronger protections, this option lasts as long as the individual’s mental health crisis treatment, plus another 30 days, regardless of the crisis treatment length.

Am I eligible for Breathing Space?

According to debt charity, StepChange, to be eligible you must:

  • Live in England or Wales
  • Owe one qualifying debt to a credit.

And you must not:

  • Have had Breathing Space in the last 12 months (this does not include mental health Breathing Space)
  • Have an IVA (individual voluntary arrangement)
  • Have a DRO (debt relief order)
  • Be an undischarged bankrupt
  • Be subject to an interim order.

Learn more about Breathing Space in general on StepChange’s website.

Types of Breathing Space

There are two types of breathing space:

  • A standard breathing space: Available to anyone with problem debt, this form of breathing space provides individuals with temporary ‘legal protections’ from creditor action for up to 60 days. Protections range from freezing most interest and charges on their debt, to pausing contact from creditors and putting a hold on any enforcement action.
  • A mental health crisis breathing space: This form of breathing space is available for individuals receiving mental health crisis treatment and can only be applied for with an Approved Mental Health Professional (AMPH). Alongside stronger protections, this option lasts as long as the individual’s mental health crisis treatment, plus another 30 days, regardless of the crisis treatment length.

Am I eligible for Breathing Space?

According to debt charity, StepChange, to be eligible you must:

  • Live in England or Wales
  • Owe one qualifying debt to a credit.

And you must not:

  • Have had Breathing Space in the last 12 months (this does not include mental health Breathing Space)
  • Have an IVA (individual voluntary arrangement)
  • Have a DRO (debt relief order)
  • Be an undischarged bankrupt
  • Be subject to an interim order.

Learn more about Breathing Space in general on StepChange’s website.

Can Moneybarn assess my eligibility?

Unfortunately, we are unable to assess a customer’s eligibility for Breathing Space under the Debt Respite Scheme. To find out if you are eligible, you must seek advice from an FCA Authorised Debt Advisor or a Local Authority, if they can provide debt advise to local residents, and discuss with them your eligibility for the scheme. A few options available are StepChange, Citizens Advice and Debt Support Trust to name a few, or we have a guide explaining possible options if you’re experiencing financial difficulty.

Important takeaways

Our conditional sale agreements are considered a secured debt, which simply means the debt is for an asset i.e., car finance or a mortgage. Therefore, your chosen FCA Authorised Debt Advisor will only be able to provide you with Breathing Space for arrears on your account, but not for your normal monthly payments. Where you can, please continue to make your monthly payments as failing to do so could negatively impact your credit score and make it harder for you to get credit in the future.

Our Customer Services Team will happily talk you through our support options. Further information on how to reach out to us can be found on our contact us page.

Can Moneybarn assess my eligibility?

Unfortunately, we are unable to assess a customer’s eligibility for Breathing Space under the Debt Respite Scheme. To find out if you are eligible, you must seek advice from an FCA Authorised Debt Advisor or a Local Authority, if they can provide debt advise to local residents, and discuss with them your eligibility for the scheme. A few options available are StepChange, Citizens Advice and Debt Support Trust to name a few, or we have a guide explaining possible options if you’re experiencing financial difficulty.

Important takeaways

Our conditional sale agreements are considered a secured debt, which simply means the debt is for an asset i.e., car finance or a mortgage. Therefore, your chosen FCA Authorised Debt Advisor will only be able to provide you with Breathing Space for arrears on your account, but not for your normal monthly payments. Where you can, please continue to make your monthly payments as failing to do so could negatively impact your credit score and make it harder for you to get credit in the future.

Our Customer Services Team will happily talk you through our support options. Further information on how to reach out to us can be found on our contact us page.

We're here to help...

Financial difficulties

If you’re experiencing financial difficulties, we want to help. Please take a look at the different support available to you and together we’ll find a solution suitable for your personal circumstances.

Contact us

You can call our Customer Services Team on 0330 555 1230. Please see our contact us page for opening hours.

We're here to help...

Financial difficulties

If you’re experiencing financial difficulties, we want to help. Please take a look at the different support available to you and together we’ll find a solution suitable for your personal circumstances.

Contact us

You can call our Customer Services Team on 0330 555 1230. Please see our contact us page for opening hours.

 
Sam Wooller, Customer Experience Communications Manager
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