Breathing Space isn’t available to everyone. There are certain criteria you need to meet to benefit from the Breathing Space scheme.
To be eligible you must:
- Live in England or Wales and
- Owe at least one qualifying debt to a creditor
And you must not:
- Have been on the Breathing Space scheme in the past 12 months (not including mental health Breathing Space);
- Be on a debt relief order (DRO);
- Have an individual voluntary arrangement (IVA);
- Be subject to an interim order or
- Be an undischarged bankrupt
Process
You can apply for a Breathing Space through StepChange a registered debt charity.
Anyone contacting the for debt advice, either online or over the phone, will be considered for eligibility for Breathing Space.
If you’re eligible and decide to apply, you’ll then be taken through the Breathing Space application process.
Use their free, online debt advice tool and they will recommend the best solution for your situation and let you know if you’re eligible to apply for the Breathing Space scheme.
If you’re eligible, you can fill in their application form online and they will submit it automatically on your behalf.
Effective date
The effective date of the Breathing Space Scheme is the date the Official Receiver approves your application.
Effect of the Breathing Space Scheme
Once you’ve completed the eligibility checks and are registered on the Breathing Space Scheme, the Insolvency Service will contact your creditors. They won’t be able to add interest or fees to your debts, or take enforcement action, for 60 days.
Someone who is receiving mental health crisis treatment the Breathing Space lasts as long as the treatment does, plus 30 days from the end of the treatment.
To ensure it runs smoothly, there will be certain things you’ll need to do, and rules your creditors will need to stick to. There will also be things that we commit to doing as we guide you through the process. The details for both what you need to do and what we will do are shown below.
The following debts are not eligible for Breathing Space:
- Secured debts (but the arrears on secured debts do qualify);
- Debts incurred after your Breathing Space started; Debts incurred because of fraud;
- Court fines (penalty charge notices like parking tickets do qualify); Obligations from a confiscation order;
- Child maintenance or money owed under an order from family court proceedings;
- A crisis or budgeting loan;
- Student loans;
- Personal injury damages;
- Advance payments on Universal Credit and
- Council tax liabilities that are not due yet
Conclusion of the DRO
If you completed your debt advice during your 60 days of Breathing Space, StepChange get in touch to confirm that your Breathing Space has ended.
No matter which debt solution you’ve chosen, once your Breathing Space has ended, you won’t be able to apply again for another 12 months.
If you haven’t completed your debt advice and don’t have a debt solution in place, you’ll need to continue making payments towards the debts that were included in your Breathing Space application if you can afford to.
- Start applying interest, charges, fees and penalties to your debt from the end date of your Breathing Space. However, they can’t backdate these for the time you were on Breathing Space, unless they’ve obtained a court order
- Take action to reclaim the debt, including contacting you
- Start or resume court action to reclaim the debt
Advantages of a Breathing Space
- A Breathing Space is free to apply for;
- Your creditors won’t be able to add interest or fees to your debts, or take enforcement action, for 60 days (or as long as your treatment for mental health lasts plus another 30 days);
- Breathing Space could help relieve some of the pressure of dealing with creditors and
- It gives you some time to get debt advice and set up a solution to deal with your debts.
Disadvantages of a Breathing Space
- You can only have one Breathing Space is 12 months and
- It is only for a period of 30 days so you need to ensure you seek appropriate advice fast.