Category: Statutory instrument

In June 2019, HM Treasury published its response to the breathing space proposal.

Under the proposal, an individual will be eligible if:

– they’ve accessed debt advice;

– they’ve been assessed as being in ‘problem debt’ by a debt adviser; and

– they’ve not entered into ‘breathing space’ within the last twelve months.

Borrowers must continue to be eligible during the breathing space; this will involve a 30 day check.

The proposed definition of ‘problem debt’ includes a borrower who is having difficulty paying their debt and has sufficient difficulty that they stand a realistic chance of entering into a debt solution (for example, a debt management plan).

There will be no right for a lender to challenge whether a borrower is eligible.

The scheme will be administered using a portal (which will tell lenders when a borrower has entered, and left, a breathing space). The register will, however, be private: lenders will only be able to check other debtors.

For the period of the breathing space, a lender will not be entitled to charge interest, fees and charges. Lenders will also not be entitled to start court proceedings. And enforcement of judgments will also be paused during the breathing space.

The period for breathing space will be 60 days.

HM Treasury proposes to publish drafting regulations by the end of 2019 with a go-live date of early 2021.