Breathing Space Schemes

To be eligible for the standard breathing space you need to meet the criteria below:

• Live in England or Wales.
  
  

• Not have previous formal breathing space in the last 12 months (this does not include informal breathing space agreed by your creditors or the previous COVID repayment holidays).
  
  

• Be struggling to pay at least one qualifying debt.
  
  

• Not be in a DRO, IVA or be an undischarged bankrupt.
  
  

• A debt adviser must apply on your behalf.

To be eligible for the mental health breathing space you need to be under the care of an approved mental health practitioner (AMPH) and meet the criteria above. 

Your AMPH must complete an evidence form for you.

The Breathing Space scheme has to be applied for by a debt adviser who is either FCA regulated or working for a local authority, you cannot make the application on your own. The debt adviser will make checks to see if you are eligible for the scheme, they will also discuss when to apply, and if an application is in your best interests.

You will be required to provide verification documents and details of all of your debts to apply for the scheme.

Your Breathing Space starts the day after your details are put onto the register and this will be confirmed in an email to you.

When you are accepted onto the Breathing Space Scheme, you will benefit from immediate protections that will:

1. Stop creditors from contacting you about the debts included.

2. Give you a break from debt repayments*.

3. Prevent recovery or enforcement action from either starting or continuing.

4.  Stop interest and charges from being added to your debts.

*Your debt adviser might encourage to you to keep paying certain priority debt repayments if it's in your better interests longer term to do so.

Direct Deductions from Universal Credit will not stop in the breathing space scheme. However, the DWP must stop direct deductions from the following benefits when notified that a claimant has entered the breathing space scheme:

• income-based Jobseeker’s Allowance

• income-related Employment and Support Allowance

• Income Support

• Pension Credit

Deductions for ongoing fuel charges and water charges (Water Direct) will continue during the ‘Breathing Space’.

If the DWP continues to take direct deductions in error, they can be emailed directly: breathing.space@dwp.gov.uk 

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.

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:

• MSE Credit Club

• ClearScore

• Experian

• Credit Karma

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.

Your name and address will be placed on a Breathing Space register. Not everyone is able to view the register. Only creditors who have a debt included in your Breathing Space will be able to access the register and they can only see the debt information relating to them.

If you are a person at risk of violence, it is possible to withhold your address from the register, your debt adviser can advise and help you with this.

You must include all of non-secured 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. 

The timing of a Breathing Space application needs careful thought and planning. your debt adviser will help you explore these factors.

Most types of debt can be included in Breathing Space, you must not leave any eligible debts out of your application.  Here are some examples:

• Credit cards

• Bank Overdrafts

• Home Credit

• Loans with Family & Friends

• Pay Day Loans

• Parking Fines & Penalty Charge Notices

• Guarantor Loans (your guarantor is not protected unless they qualify for Breathing Space)

• Mobile Phone Arrears

• Loans

• Rent Arrears

• Mortgage Arrears

• Hire Purchase Arrears

• Secured Loan Arrears

• Utility Arrears, such as water, gas, electric

• Council Tax & Business Rates Arrears

• Income Tax & National Insurance Arrears

Certain debts do no not qualify for the Breathing Space protections, you will need to still make and maintain payment arrangements with these types debt.

Typical excluded debts:                                                                                                                                           

• Student loans

• Budgeting and crisis loans from the Social Fund

• Universal Credit advance loans

• Magistrate Court fines (This does not include Penalty Charge Notices)

• Council tax liabilities which have not yet fallen due

• Compensation owed by you as a result of a personal injury claim

• Child maintenance payments and arrears

• Fraudulent debts

• Criminal confiscation order payments

• Secured debts, such as Conditional Sale, Hire Purchase, Mortgage (only arrears for these types of debt can be included in Breathing Space)

• Certain business debts (i.e. debts from a business registered for VAT, or a partnership with another person and the debt relates solely to the business)

• New debts incurred during a breathing space are not qualifying debts

If you cannot meet the above ongoing liabilities during the Breathing Space, you must discuss this with your debt adviser as soon as possible. 

If you miss an eligible debt out of your application by mistake, you can add it in during the Breathing Space. However, the additional debt will only receive the protections until the end of the breathing space period, not for the full 60 days.

If you identify that a debt has been missed off, you should contact your debt adviser to add it as soon as possible to make sure you maximise the protection timescale.

A creditor will not be able to start court action against you whilst you are in breathing space. 

However, if a creditor has already started court action the court procedures can still proceed, but no enforcement action to try and recover money from you can be taken, e.g. a liability order for council tax can be issued but not enforced.  

Creditors cannot start bankruptcy proceedings against you or issue a statutory demand during a Breathing Space.

The breathing space scheme stops most evictions except a Section 21 notice eviction, also known as a 'no fault eviction'. 

You must try to be added to the breathing space scheme at least one day before the eviction to give the courts enough time to stop the process.

If a creditor has already obtained an attachment of earnings order to take money from your wages, a breathing space application will not stop these.

You must continue to make payments to ongoing liabilities, such as your contractual rent or mortgage. 

You do not need to pay your arrears but if you can afford to, it might be in your best longer term interests to keep paying priority arrears. 

AMHPs are mental health professionals who have been approved by a local social services authority to carry out certain duties under the Mental Health Act. They are responsible for coordinating mental health assessments and admissions to hospital.

AMPHs might be social workers; nurses; occupational therapists; psychologists, but cannot be your GP.

Yes, a creditor can challenge a breathing space if they have grounds to believe you do not meet the criteria. The creditor can apply to the court using form N244D. 

The creditor will have to prove that you should not be in the breathing space scheme.