What is the Breathing Space debt scheme and how does it work?

Full answer

Breathing Space, formally the Debt Respite Scheme, is a free government scheme in England and Wales that protects people in problem debt while they seek a solution. It affects anyone struggling with debts such as credit cards, loans, council tax arrears, or utility bills who is not already in another formal arrangement. There are two types. Standard Breathing Space lasts up to 60 days. During it, most creditors must stop charging interest, fees and penalties on the included debts, and they must pause enforcement action and contact about those debts. Mental Health Crisis Breathing Space is for people receiving crisis mental health treatment; it lasts for the duration of that treatment plus a further 30 days, and a nominated point of contact (such as an Approved Mental Health Professional) can apply on the person's behalf. You cannot apply directly yourself for standard Breathing Space - you must go through an FCA-authorised debt adviser (for example StepChange, Citizens Advice, or National Debtline), who assesses your situation and registers the debts on a central register that notifies creditors. There is no fee. Important limits: Breathing Space is not a payment holiday in the sense of writing off debt - you still owe the money, and you should keep paying ongoing liabilities like rent, mortgage and current council tax where you can. Certain debts are excluded, such as secured debts (mortgages), student loans, and court fines. It is a one-per-12-months protection in the standard form, so it is best used as a runway to set up a longer-term solution like a Debt Management Plan, an IVA, a Debt Relief Order, or bankruptcy. Because no specific monetary thresholds apply, the key action is to contact a free debt adviser promptly. Scotland has its own equivalent moratorium under the Debt Arrangement Scheme.