Breathing Space, formally the Debt Respite Scheme, is available in England and Wales. It can temporarily restrict creditor action while an eligible person works with an authorised debt adviser. It is not a payment holiday for every bill and does not write debt off.
Standard Breathing Space #
An authorised debt adviser decides whether standard Breathing Space is appropriate. If it is, the adviser enters the person and qualifying debts on the Insolvency Service register. Protection starts the following day and normally lasts 60 days.
The adviser carries out a midpoint review between days 25 and 35. The person must continue engaging with advice and, where able, meet ongoing liabilities.
Who may qualify? #
The adviser checks residence, debt, prior use and current insolvency status. A standard case is not available merely because someone has missed a payment. It must be appropriate for an individual with problem debt who needs time for advice and is likely to benefit.
Important restrictions include current bankruptcy, a DRO, an IVA or an interim order, and having had a standard Breathing Space in the 12 months ending on the new application. The full statutory test applies.
Which debts are covered? #
Common moratorium debts can include consumer credit, overdrafts, utility arrears, council tax arrears, benefit overpayments and arrears on rent or a mortgage. The adviser must notify each debt and creditor.
The list is not universal. Excluded debts include criminal court fines and Universal Credit advances, along with other statutory categories. Secured lending and ongoing liabilities require particular care: arrears may be covered while current mortgage, rent, utility, tax and similar payments still fall due.
If a qualifying debt was missed from the application, tell the adviser. It may be added after the start, but the creditor’s protection dates and notification must be checked.
What creditors must and may do #
For a notified moratorium debt, creditors are generally restricted from:
- demanding payment from the debtor;
- adding most interest, fees, penalties or charges during the moratorium;
- starting or continuing specified enforcement; and
- contacting the debtor about payment, except for permitted communications.
This does not block every communication. Statements, legally required notices, responses requested by the debtor and communications unrelated to payment can still be allowed. Existing non-enforcement court proceedings may continue to judgment in some circumstances, while enforcement or default judgment is restricted unless the court permits it.
Interest and fees normally restart from the end date; they cannot simply be backdated across the protected period unless a court allows it.
Bailiffs and deductions #
An enforcement agent should not take further prohibited steps on a notified moratorium debt. However, goods already controlled, a controlled-goods agreement, action completed before the start, excluded debts and court permission can change the result. Do not hide or dispose of controlled goods.
Breathing Space does not automatically stop every deduction. Existing attachment-of-earnings deductions can continue in some circumstances, and excluded benefit deductions such as Universal Credit advance recovery are not covered. Give the adviser every deduction and court reference.
Rent and mortgage arrears #
Arrears that arose before the moratorium can be included. A landlord is restricted from serving or progressing possession on rent-arrears grounds for those protected arrears while the moratorium applies. Other grounds may still be available, and ongoing rent must be paid if possible.
Mortgage arrears and current instalments also need specialist advice. Breathing Space is temporary; use it to agree a sustainable housing plan.
New credit and credit files #
Breathing Space is not automatically shown as a special marker on a credit file. Missed payments, arrears and defaults can still be reported under normal accuracy rules.
If applying for credit of more than £500, the person must tell the lender about the Breathing Space. That is a disclosure rule, not an automatic cancellation trigger for any new borrowing. Borrowing during a debt crisis can still make the position worse.
Mental health crisis Breathing Space #
This route is for someone receiving qualifying mental health crisis treatment, not simply anyone receiving routine mental health support. An Approved Mental Health Professional (AMHP) provides the statutory evidence that the treatment criteria are met. Other clinicians, social workers, carers or representatives can make a referral to the debt adviser, but they do not replace the required AMHP evidence.
Protection lasts for the qualifying treatment period plus 30 days. It has no standard midpoint review and can be used more than once where the statutory conditions are met.
How protection ends #
Standard protection normally ends after 60 days. It can end earlier in limited circumstances following the review process, including material ineligibility or failure to engage or meet ongoing obligations despite being able to do so. Creditors can request a review; they cannot simply opt out.
When protection ends, ordinary creditor rights resume. Interest and charges do not normally get backdated over the moratorium. Make the longer-term plan before the end date.
Use the time well #
The adviser should compare every suitable option, which may include benefits and budgeting help, informal arrangements, a DMP, a DRO, an IVA or bankruptcy. Breathing Space is not evidence that an IVA is suitable.
Use the debt-options calculator only for an initial comparison. It cannot start a moratorium, classify a debt or guarantee eligibility for another solution. SourcesSources checked for this guide