All about the Breathing Space scheme
The government’s new initiative to protect individuals from problem debt launched on 4th May 2021. Officially called the Debt Respite Scheme, ‘Breathing Space’ aims to account for the mental health implications inflicted by problem debt. It can protect individuals from court action, fees and interest for up to 60 days in an attempt to reduce the acute stress often associated with such high pressure situations.
Although it requires certain eligibility checks, the scheme is completely free and will prevent creditors from adding interest or fees to the current debts facing an individual. It will also mean that no enforcement action can be taken during those 60 days as well.
It is worth noting that individuals partaking in this scheme do not receive a payment holiday. They are expected to continue making regular arranged payments. It does mean, however, that during those 60 days under the scheme’s protection, no action can be taken against individuals who cannot afford to continue making regular payments.
The allotted 60 days represents an attempt by the government to recognise the significant and debilitating effects problem debt can take on the individual in question. They aim to provide enough time to allow individuals to seek advice surrounding their situation and set up a debt solution to enable them to get their finances back on track.
The scheme is separated into two 30 day segments. After an application is approved by the Insolvency Service, creditors will still have 20 days in which to challenge the application put forward. Any debts added to the scheme can do so during the 60 day period as long as the debts predate the application to the scheme. However, this does not mean that the scheme is extended with the inclusion of new debt (for example, if an individual adds a debt to their scheme on day 45, this debt would only incur Breathing Space for 15 days).
There is a 30 day review of each applicant’s situation which determines whether the scheme can continue for another 30 days. Although, in most cases, the full 60 days are usually granted.
If you need help with problem debt and are interested in applying for the Breathing Space scheme follow this link. If your debts are joint, it is imperative that you have consent from your partner.
If you simply need advice or an expert hand to help annul your bankruptcy, contact Asset Solutions today. Our friendly team of specialists have a wealth of industry knowledge and can provide you with assistance throughout all stages of the insolvency process. Get in touch with us today on 0800 689 3861 and begin your journey to getting back on your feet.
