People in debt could get two month ‘breathing space’

Small Businesses are struggling to get invoices paid

People who are in debt from credit cards, loans and other personal debt sources could be given ‘breathing space’ under new temporary measures the government has announced.

The Debt respite scheme has been launched to help protect debtors in relation to a number of personal debts which include personal financial agreements and rent obligations.

During the current pandemic, debt charity Stepchange has warned of a impending “personal debt tsunami” of £6Bn.

It is said that over 1.2million people have fallen behind on their monthly bills along with 590,000 on their rent payments.

Households that are entered onto the respite scheme will see their debts frozen with no interest to be added. As part of the deal, they must mediate with the creditors to get their payments back on track.

The break from payments can be cancelled if payments are made where possible and agreed, during the breathing space.

Who is eligible?

“Most debts” will be covered by the scheme according to, including:

  • Credit cards
  • Store cards
  • Personal loans
  • Pay day loans
  • Overdrafts
  • Utility bill arrears
  • Mortgage or rent arrears

Tax and benefit debts are also likely to qualify too. Guarantor loans will be covered, but the guarantor will need to put in a separate application.

Any debts accrued during the ‘breathing space’ will not be covered to prevent issues such as misuse.

Who is not eligible?

There are a number of debt which are not covered by the scheme which include:

  • Secured debts
  • Debts incurred after your breathing space started
  • Debts from fraud
  • Court fines (but penalty charge notices like parking tickets apply)
  • Child maintenance debts or money owed under an order from family court proceedings
  • Debts from a confiscation order
  • A crisis or budgeting loan
  • Student loans
  • Advance payments of Universal Credit
  • Council tax debts that are not due yet
  • Personal injury damages

Also exempt from this programme are people already subject to DRo’s, IVA’s or have filed for Bankruptcy.

The benefits of international debt collection.


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