Breathing Space Scheme
The Debt Respite Scheme also known as the Breathing Space Scheme (commenced on 4 May 2021) as an additional, temporary debt option administered by an experienced debt adviser. The standard scheme freezes interest and charges and places a holding period on most debts for 60 days. There is a more generous Breathing Space scheme for eligible persons with an approved mental health practitioner. You must satisfy the eligibility criteria to apply.
One Breathing Space per annum
Through the standard Breathing Space scheme you can only apply for its temporary protection once a year, this means that the timing of your application needs to be carefully considered with the help of an experienced debt adviser. It is therefore important to work with your debt adviser to progress a debt strategy before the hold period of 60 days ends. The Breathing Space scheme should not be advised to you as a default option when you engage in debt advice, an application needs to be appropriately timed.
Are you eligible?
How does it work?
How does the Breathing Space help me?
Give me some examples
The Breathing Space Scheme isn't going to suit everyone. It is one of a number of debt options to explore and consider. Here are some examples when it might be an appropriate option:
To give you time to access debt advice and/or sell an asset(s) or release equity.
To ease the pressure of creditors contacting you, if this is causing a bad affect on your health.
Debt repayments stop so that you can focus on paying essential household bills.
It may be easier to keep up with priority debt repayments, which in most cases is recommended.
Interest and charges are frozen to prevent debt escalating, this might be important if your debt total is near the debt relief order eligibility limit.
To stop an enforcement process in its tracks, such as eviction.
To stop a bailiff visiting or enforcing a debt.
To give you time to apply for a debt solution.
To improve your financial position.
NB. 60 days isn't that long so you will need to be committed to stay engaged with the debt advice process to fully benefit.
Will it affect my credit score?
A Breathing Space Scheme application is likely to affect your credit score and credit worthiness (ability to obtain credit). If one of your possible debt options is to consolidate borrowing, and/or to release equity, you might want to carefully weigh up when to, and whether to apply for the Breathing Space Scheme.
However, you should bear in mind that your credit score might already be affected by your financial situation, you can check this by obtaining a free credit report from the following:
The above sites are currently free to access, but please make sure that you cancel any trial subscriptions that you come across, otherwise you may be charged for ongoing services.
Whether there is an impact on your credit score or not, if you are facing imminent enforcement action, such as eviction, applying to the Breathing Space Scheme might be your best option.
Breathing Space Register
Can I leave some of my credit lines out?
You must include all of your debts in a Breathing Space scheme application. This means that if you have a bank overdraft that you regularly use, you will lose access to this line of credit. You can instead open a safe and basic bank account and re-direct income and expenses to the new account. Please visit our web page on Safe and Basic Bank Accounts. Similarly, if you are still using a credit card, you will need to stop using it and include the debt in your application.
Once these credit lines have been added to a Breathing Space application, it might be difficult to re-establish them when it ends. Again, the timing of a Breathing Space application needs careful thought and planning. your debt adviser will help you explore these factors.