Can I request a hold on recovery action?
As of 4 May 2021, a new statutory Breathing Space scheme can assist people in problem debt better manage their finances and reach sustainable solutions by seeking professional debt advice. This scheme is designed to provide people with debt problems the right to legal protection from creditors for a limited period of time.
Who is eligible?
To be eligible for Breathing space, an applicant cannot, or is unlikely to, repay all or some of their debt. If this is applicable, the applicant can then apply for one of two schemes. These are:
Standard Breathing Space
To be eligible for the Standard Breathing Space, applicants must be the following:
- Be an individual
- Owe a qualifying debt to a creditor
- Live or usually resides in England or Wales
- Not have a debt relief order (DRO), an individual voluntary arrangement (IVA), an interim order, or be an undischarged bankrupt at the time they apply
- Not already have a Breathing Space or have had a standard breathing space in the last 12 months at the time they apply.
Mental Health Crisis Breathing Space
To be eligible for the Mental Health Crisis Breathing Space, you must meet the same criteria as the Standard Breathing Space. However, if an Approved Mental Health Professional can certify that you are in receiving mental health crisis treatment, then you may be eligible for protection provided under the Mental Health Crisis Breathing Space.
How long does Breathing Space last?
If you are eligible for the Standard Breathing space, you will be provided with legal protection from creditors action/fees for up to 60 days. If you are eligible for the Mental Health Crisis Breathing Space, you will be provided with legal protection for as long as you are receiving mental health crisis treatment plus a further 30 days. This is applicable no matter how long the crisis treatment lasts.
How do I apply for Breathing Space?
To start a breathing space application, you must contact a debt advice provider who is authorised by the Financial Conduct Authority (FCA) use the Money Advice Service debt advice locator to find online, telephone and face to face advice services.
What information will I need to provide?
When applying for a Breathing Space, you must provide your debt advisor with:
- Full name
- Date of birth
- Usual residential address
- Details of the debts you owe including the name and contact details of the creditor and the type of debt that is owed to them. If the creditor has an agent acting on their behalf, you must also provide their details.
When applying for a Mental Health Crisis Breathing Space, you must provide the same information. However, the following people can apply on your behalf:
- Your carer
- An approved mental health professional
- An appointed care co-ordinator
- A mental health nurse
- An appointed independent mental health advocate or mental capacity advocate
- A representative acting on your behalf