Debt Respite Scheme For Money Advisors
1. Your responsibilities
1.1 Debt advice providers
Once you have started the breathing space process for a client, the electronic service will send a notification to their creditors to tell them that each debt owed to them by your client is in a breathing space and when the breathing space started. The notification will give the creditor information to help the creditor to identify your client and their debt and check for any other debts that your client may owe them. They need to apply the breathing space protections, as well as contact any other agents or third parties who may need to know about it. We have separate guidance for creditors.
1.3 The Insolvency Service
2. Roles specific to the mental health breathing space
2.1 Approved Mental Health Professionals (AMHPs)
2.2 Nominated point of contact
3. The electronic service and register
3.1 The electronic service
3.2 The breathing space register
3.3 Information recorded on the breathing space register
3.4 Correcting mistakes on the register
3.5 Data processing and statistics
4. Before a breathing space starts
4.1 Who can apply for a standard breathing space
Any client who is eligible and is having trouble paying their debts can apply to a debt adviser for a standard breathing space. Their representative (for example, someone with power of attorney) can also apply on their behalf.
4.2 Who can apply for a mental health crisis breathing space
4.3 What you need to do before starting a standard breathing space
Before you start a standard breathing space, you must get enough information to understand your client’s financial situation. This is so you can advise them on whether they are suitable for a breathing space, and any consequences of being in one. However, it is not necessary to complete the full debt advice process with your client before you consider a breathing space. You also do not need to complete a full Standard Financial Statement at this stage.
You should remind your client or anyone acting on their behalf that they need to give you accurate information, and they should not withhold any relevant information.
You can give advice about a standard breathing space online, by telephone or face-to-face.
Some debt advisers might use online tools to make recommendations to their clients. Any debt adviser using an online tool must be satisfied that the system they use is capable of establishing that:
a client is eligible for a breathing space
it’s appropriate for them to enter one
the debt adviser is meeting their obligations
The level of the advice you need to give at this stage will vary from client to client. You should use your organisation’s processes to decide on what advice to give.
You should tell your client about the impact of a breathing space on their credit file. Firms that report whether payments are received or not will keep doing this during a breathing space. A breathing space cannot repair credit file issues or stop any impact from decisions your client makes during or after it. But there should be no automatic effect on the credit file triggered by starting the breathing space, and there is no automatic flag or code that will stay on the file after the breathing space has finished.
4.4 Information your client must give you for a standard breathing space
4.5 Working out if a standard breathing space is appropriate
4.6 What you need to do before starting a mental health crisis breathing space
4.7 Information AMHPs must provide for a mental health crisis breathing space
4.8 Conditions for starting a breathing space
4.9 Client eligibility for a standard breathing space
4.10 Qualifying debts
4.11 Excluded debts
4.12 Request not to disclose client’s address
4.13 Client agreement for a standard breathing space
5. Starting a breathing space
5.1 Submitting information to start a breathing space
5.2 Additional information from your client
5.3 When the breathing space starts
5.4 Notifications to creditors of the start of a breathing space
5.5 Notification to your client of the start of the breathing space
6. Referring your client to another debt adviser
7. During a breathing space
7.1 Your duty to communicate with your client during a standard breathing space
7.2 Your client’s responsibilities during a breathing space
7.3 Your client’s additional responsibilities during a standard breathing space
7.4 Ongoing liabilities in a standard breathing space
7.5 Contact between you and your client’s creditors
7.6 When a creditor can contact your client during a breathing space
7.7 What creditors need to do after receiving a breathing space notification
7.8 Additional debts or creditors identified after a breathing space starts
7.9 Creditors during a breathing space
7.10 Stopping creditor enforcement action
7.11 Dealing with agents appointed to enforce a breathing space debt
7.12 Existing legal proceedings
A creditor might have already filed a petition for bankruptcy or started other legal actions for a breathing space debt before the breathing space started. In this case, they must tell the court or tribunal that a breathing space has started.
7.13 Where a court judgment or order has not yet been issued
Any court that receives notification about, or otherwise becomes aware of, a breathing space where a bankruptcy petition in relation to a breathing space debt has been presented, must stay the bankruptcy proceedings until the breathing space ends or is cancelled. Other court proceedings about the debt (other than enforcement of court judgments or orders) can continue until the court or tribunal makes an order or judgment. A breathing space also does not prevent a creditor obtaining a judgment where the client makes an admission before or during the breathing space.
7.14 Where a court judgment or order has been issued
7.15 Creditors not complying during a breathing space
7.16 How long a standard breathing space lasts
7.17 How long a mental health crisis breathing space lasts
7.18 Creditor request for a review
7.19 Creditor applies to the court to cancel
7.20 The midway review in a standard breathing space
7.21 Requesting information about mental health crisis treatment
7.22 Cancelling the mental health crisis breathing space
7.23 Death of your client during a breathing space
8. After a breathing space
8.1 After a standard breathing space has ended
8.2 After a mental health crisis breathing space has ended
Once the mental health crisis breathing space is finished, creditors can start to take action again, just as they can after a standard breathing space ends. Your client might need another period of protection from creditor enforcement action and help in dealing with their debt. In these cases, your client can take debt advice, and apply for a standard breathing space. A debt adviser will consider if they’re eligible and it’s appropriate for them.