Individuals to be protected from ‘devastating impact’ of problem debt

A new Breathing Space scheme will protect individuals with problem debt, with those in mental health crisis to get further protections while they receive treatment.

  • new Breathing Space scheme will protect individuals with problem debt by freezing interest payments and halting enforcement action from creditors
  • those in mental health crisis will see further protections while they receive treatment
  • scheme will cover wide range of debts, including local and central government debts

Individuals and families struggling with problem debt will be given extra help and time to get their finances under control, City minister John Glen announced today.

The new plans will see the introduction of a 60-day Breathing Space period from 2021, where people with problem debts will be protected from enforcement action from creditors and will see their interest frozen.

During this period individuals must engage with professional debt advisers, so they can find a long-term solution to their debts and get back on track with payments.

As part of these plans, and to acknowledge the links between problem debt and mental health issues, the government is also confirming that individuals receiving NHS treatment for mental health crisis will not need to seek debt advice during the 60-day period. This will remove a key barrier to access for this group. They will continue to receive the same Breathing Space protections, which will last for the whole of their treatment.

City minister, John Glen, said:

Problem debt can have a devastating impact of people’s lives, putting a huge burden on individuals which can lead to family breakdown, stress and mental health issues.

No one should be stuck in an endless cycle of debt and facing the ever-looming threat of invasive debt collectors.

That’s why I’m introducing this new scheme, giving everyone access to the advice, time and support they need to both get their finances under control and get away from the perpetual stress and worry debt can cause.