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Getting out of debt is vital for those who have borrowed money and are struggling to make repayments. However, as anyone who has been in debt and struggled to manage repayments can attest, it isn’t always that easy.

Accumulating additional fees and charges just make it that bit more difficult to get debts under control and ensure that more serious actions do not have to be taken in order to stay afloat. That is why the government have announced a welcome initiative called ‘Breathing Space’ that will assist consumers in handling their debts and creating a structured way of getting out of debt and regaining financial composure.

Whilst the scheme will be launched in early 2021, it is now being highlighted again in conjunction with Debt Awareness week, allowing those who are struggling to get 60 days of ‘breathing space’ from having to make repayments. This could be the first step for many UK consumers who would like to go from struggling in debt to financially stable once again.

What is Breathing Space?

Breathing Space is a scheme initiated by the UK government to help those struggling to cope with debt, giving them a 60-day period where any repayments are frozen.

This is acknowledging the toll that being in debt can have on your wellbeing, lifestyle and mental health, by giving a person 2 months to get back on track and start planning a way to manage debt effectively. It also includes professional debt advice and access to mental health crisis treatment, to ensure the affected person can tackle this issue in all aspects, creating a positive plan for the future.

According to the GOV.UK website, Breathing Space could help over 700,000 people in the UK in the first year, rising to over 1 million people every year after that. It will also assist 25,000 to 50,000 people who are currently in mental health crisis treatment per year.

Ultimately, if a person in debt can start to make controlled repayments for the future, whilst reducing the negative impact on their wellbeing, it means the scheme has been a success.

What types of debt does it protect me from?

Once the scheme has launched in early 2021, it should protect you from all forms of personal and business debt that you might be in. This can include loans, credit cards, mortgages, finance agreements and any other additional agreements where you are having to make monthly repayments.

Not only will it allow you to freeze these repayments for 60 days, but it should also stop any enforcement action being made by creditors, who are trying to collect the money owed by using debt collectors or other means.

Will I be eligible for the scheme?

According to government guidelines there are three criteria you have to fulfil to apply to be a part of their breathing space scheme:

  • You’ve already accessed debt advice
  • You’ve been assessed as being in ‘problem debt’ by a debt advisor
  • You’ve not already accessed the breathing space scheme in the last 12 months

The noted exception is if someone is already receiving mental health crisis treatment, whereby they will be able to go through a Mental Health Alternative Access system to apply. This can also result in an extended period of breathing space to help the individual get back on top of their wellbeing and finances as a whole.

The applications for Breathing Space will be ran through an Insolvency-ran online portal, where you will be able to fill out an application with the help of a debt advisor.

What can I do if I’m struggling with debt now?

You can still apply for breathing space from individual creditors by simply contacting them and asking for it. Most creditors will already have a scheme that will last for 30 days, meaning that you can least have a short period where repayments will be frozen to get yourself back on track.

For more information on arranging breathing space with multiple creditors, get in touch with a debt advisor or speak to the lender or provider you are currently in debt with. You can also contact StepChange or Citizens Advice for more information on how to get out of debt for the future.