What is Breathing Space?
Breathing Space is a free government scheme that stops you being chased for debts.
Breathing Space protects you while you seek debt advice and work towards a debt solution. For up to 60 days, the people you owe money to cannot:
- Add interest or fees to your debts
- Take enforcement action
- Contact you for anything other than:
- Regular statements or
- Auto-generated messages
This applies to all the debts in your Breathing Space.
How do I apply for Breathing Space?
You need to get debt advice from an approved organisation to apply for breathing space. A debt advisor will:
- Build a budget with you
- Check your debts can be included
- Check that you can apply for Breathing Space
- Submit your application to the Insolvency Service
It is easiest to get started online. How Your Debt Advice Session Works. StepChange for free.
You may be able to get Breathing Space if you:
- Live in England or Wales
- Have at least one qualifying debt
You cannot get Breathing Space if you:
- Are on a debt relief order (DRO)
- Have an individual voluntary arrangement (IVA)
- Are subject to an ‘interim order’. This is an order your insolvency practitioner (IP) may apply for ahead of making a proposal to creditors, as part of setting up an IVA
- Have an undischarged bankruptcy
- Have been on the Breathing Space scheme in the past 12 months (not including Mental Health Breathing Space)
Is Breathing Space a Payment Holiday?
No. Breathing Space is not a payment holiday. You need to keep making regular payments if you can.
Here are the differences:
Breathing Space
- Creditors must comply
- Apply via debt advisor and register with insolvency service
- Interest and charges are frozen
- Payments are not paused
- Keep making payments if you can
Payment Holiday
- Creditors must agree
- Less formal agreement between you and your lenders
- Interest and charges can be added
- Payments are paused
- Payments must be made up in future
In some cases the people you owe can still take action against you:
- After your 60 days is up
- If you are facing eviction measures
What debts are included?
Most unsecured debts can be included in Breathing Space. This includes things like:
- Credit Cards
- Payday loans
- Store cards
You cannot get Breathing Space for:
- Secured debts. But the arrears on secured debts can be included
- Debts you run up after your Breathing Space has started
- Debts caused by committing fraud
- Court fines. But 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
- Council tax liabilities that are not due yet
This article has been taken from the Step Change charities website with whom we partner to provide Debt Management services to our members.
Unlike other areas of the site, we do not receive any remuneration or payments as a result of referrals to the Debt Charity.
