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Equalities and Rights Equalities and Rights

Adopt a “Breathing Space” scheme for people in serious problem debt

Last updated: 12:34pm 21 January 2019

We will adopt a “Breathing Space” scheme, with the right safeguards to prevent abuse, so that someone in serious problem debt may apply for legal protection from further interest, charges and enforcement action for a period of up to six weeks. Where appropriate, they will be offered a statutory repayment plan to help them pay back their debts in a manageable way. This will give eligible debtors time to seek advice and assistance to apply for a sustainable solution to their debt.

Conservative Party Manifesto 2017, p.60

Our verdict

Problem debt is a serious issue for millions of people across the UK, with the government revealing that many people actually wait 12 months or more before seeking help.

This policy is a promise to adopt a “breathing space” scheme, under which people in debt would have up to 6 weeks free from further interest, charges and enforcement action, providing more time to seek debt advice and assistance.

In October 2017 the government launched a consultation on how best to create such a scheme. The debt advice sector and creditors were called upon for advice and information about how to best access and enter a “breathing space”, how it would work for creditors and debtors and how to best design a statutory debt management plan. The consultation concluded in January 2018, and the government response was published in June 2018.

The Financial Guidance and Claims Act 2018 places a legal duty on the government to “consider whether to make regulations” regarding a breathing space, or debt respite, scheme, and in its response to the consultation, the government said it “intends to lay regulations to establish the scheme during 2019”.

A further step towards fulfilment came when the government launched a consultation on a policy proposal for the breathing space scheme. That consultation is scheduled from 29 October 2018 until 29 January 2019.

The government is clearly aiming to establish this scheme in 2019, so this manifesto promise can be marked as ‘in progress’. We’ll move it to ‘done’ once the regulations are in place and the scheme is up and running.  Follow this policy for developments.

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