This fact sheet covers England & Wales. You will need different advice if you live in Scotland.
Use this fact sheet to:
- find out if you might qualify for breathing space;
- understand how breathing space might benefit you; and
- find out which debts can be included in breathing space.
What is breathing space?
Breathing space is a government scheme which is designed to give you time to receive debt advice and find a solution to sort out your debt problems. There are two kinds of breathing space.
- Standard breathing space is where most creditors will have to stop collection and enforcement of your debts. Creditors will also have to freeze interest and charges on any eligible debts. See the Which debts can be included in breathing space? section.
- Mental health crisis breathing space can provide extra protection for people who are receiving mental health crisis treatment. You can find more information in the What is a mental health crisis breathing space? section.
Am I eligible for standard breathing space?
To be eligible for standard breathing space you need to meet the following criteria:
you need to live in England or Wales;
you must be unable to repay some or all your debts 'as they fall due';
you must not be in a DRO, IVA or be an undischarged bankrupt; and
you must not have had breathing space in the last 12 months.
You will need to apply for standard breathing space through an approved debt adviser. Your debt adviser must agree that:
you need time to get debt advice; and
you are likely to enter a debt solution.
Are you up to date with payments?
Breathing space is more likely to help if you are already behind with your payments. If you are up to date with your household bills and credit repayments and can afford them, breathing space is unlikely to be an option for you. Breathing space gives you time to get debt advice but does not give you a 'payment holiday' by deferring your debt payments.
If you stop making payments to your creditors, your credit file could be affected. Your account will fall into arrears and this can lead to your lender treating your account as being in default.
Overdrafts and access to credit
You need to be careful if you regularly use your overdraft or another form of credit, such as a credit card, to live on.
As all your debts must be included in breathing space, you may lose access to these lines of credit. Contact us for advice if you are concerned that losing access to credit will make it difficult to cover your living expenses.
It is also a good idea to make sure that you have a safe bank account if you need to. A safe bank account would be one with a bank or building society that you do not owe any money to. You can find out more in our Safe bank account fact sheet.
What happens when you apply for standard breathing space?
Once you are in breathing space, all creditors who have been included will be informed and they must stop any collection or enforcement activity.
Breathing space will last for 60 days as long as you remain eligible. Once the breathing space ends, creditors will be able to collect the debt in the usual way.
During breathing space, you will need to try and decide on the best solution to deal with your debts. To do this you will need to work out what payments you can afford to pay your debts. To help you, visit our online tool and click ‘Get started’. If you can’t afford your payments, we’ll let you know which debt solutions are suitable for you.
For more information on your possible debt solutions please see our Ways to clear your debt fact sheet.
Once you have had standard breathing space you will not be able to have another one for 12 months.
You will be expected to meet certain requirements during breathing space. These are explained in the Requirements during breathing space section.
Your creditors can ask your debt adviser to review your breathing space. This could happen if the creditor felt that:
- you do not meet the eligibility criteria;
- the debt you have with them is not eligible for breathing space; or
- you have enough money to repay the debt.
Your debt adviser will carry out the review. The debt adviser can cancel your breathing space if they agree there are sufficient grounds.
If your lender is unhappy with the outcome of the review, they can apply to court to try to get your breathing space cancelled or have their debt removed.
If the court agrees with your creditor’s request for review, you may be asked to pay the creditor’s costs.
Your credit file and the breathing space register
Whilst you are in breathing space, creditors will report any payments you miss to the credit reference agencies in the usual way. The credit reference agency will not be told that you are in breathing space.
Individuals lenders who have been included in a breathing space may keep their own record of you having breathing space. This could mean that future borrowing with that lender might be affected.
Basic personal details, such as your name and address, will be placed on a breathing space register. However, this is not available for everyone to view. Only creditors who have had a debt included in your breathing space will be able to access the register and they will only be able to view their debt along with your details.
Although the public cannot see the breathing space register, you can still ask that your residential address is not added to the register if you believe there may be risk of violence against you or someone you live with. Discuss this with your debt adviser.
Debts in joint names
If any of the debts you have included in breathing space are in joint names, the other person named on the agreement will also be protected against enforcement action by your creditors.
However, other people who are liable for debts included in your breathing space will not be added to the breathing space register.
Not paying your debts will have an effect on the other liable persons credit file as well as your own. You may want to discuss this with the other liable person to see if they want to maintain the payments even if you cannot.
After the 60 days breathing space, creditors will be able to start collecting the debt in the usual way. If the other liable person is unable to maintain the payments, they will need to seek debt advice themselves.
It is not possible to make a joint breathing space application. The other liable person may need to make their own breathing space application if they have their own debts that they need help with.
Debts with a personal guarantor
Some creditors ask for a guarantor before agreeing to lend money or provide a service. If the person who borrowed the money or used the service doesn’t pay, the creditor will ask the guarantor to pay.
If somebody has given a personal guarantee for a debt you include in a breathing space, they will not receive any protection from the creditor.If you are behind with the debt repayments or the guarantor cannot keep up the payments, the creditor can still carry on with collection and enforcement activity against the guarantor.
Which debts can be included in breathing space?
Most types of debt can be included in breathing space and you are not allowed to leave any eligible debts out of your application.
If you accidentally miss an eligible debt out of your application, you can add this in later. However, it will only receive the protections until the end of the breathing space period, not for the full 60 days.
Arrears on essential bills
Arrears are payments that you have missed on your debts and household or business bills. Arrears can also include interest and charges that have been added.
You can normally include arrears on essential bills. Examples include:
- rent arrears;
- mortgage arrears;
- gas and electricity arrears;
- water arrears;
- hire purchase arrears;
- council tax and business rates arrears; and
- income tax and National Insurance arrears.
As covered earlier in the fact sheet, whilst you can include arrears on essential bills; you will usually have to keep up with your ongoing repayments. See the Things I’ll need to do in a breathing space section for more detail on what may happen if you don’t pay your ongoing essential bills.
You can include all non-priority debts. Examples of debts you can include are:
- mobile phone arrears;
- credit cards and store cards;
- bank overdrafts and bank loans;
- loans to finance companies;
- home-collected credit;
- family or personal debts; and
- mortgage shortfalls (money you owe if your house was sold for less than the outstanding mortgage).
Which debts can’t be included in breathing space?
Some debts cannot be included in breathing space. These include:
- magistrates’ court fines;
- maintenance, Child Support Agency (CSA) and Child Maintenance Service (CMS) payments and arrears;
- student loans;
- budgeting loans and crisis loans;
- money owed under a ‘criminal confiscation order’;
- Universal Credit advances;
- fraudulent debts;
- debts resulting from certain personal injury claims against you.
You will be expected to pay your ongoing payments to these debts, and any arrears you may have. You can include them in the outgoings on your budget sheet.
Secured debt payments
For secured debts, such as a mortgage, secured loan or hire purchase agreement, you can’t include the secured lending itself in breathing space. You will be expected to pay your ongoing payments to these arrangements. You can however include any arrears that you may have.
Your business debts are not eligible for breathing space if your business is registered for VAT, or you are in a business partnership with anyone else, and the debt you have relates solely to the business. It may be difficult to work out if you are eligible for breathing space. If you are self-employed contact Business Debtline.
The advantages of breathing space
- Your creditors cannot add interest or charges to an eligible debt during breathing space.
- Your creditors or collection agency cannot contact you to ask for payment towards a debt that has been included in breathing space.
- No enforcement action can be taken against you for a debt that has been included in breathing space. You can find more information about what types of enforcement you would be protected from in the Protections during breathing space section.
Protections during breathing space
Breathing space will stop creditors that can be included from starting or continuing with enforcement action against you. The protections you receive will depend on the types of debt you have and the kinds of enforcement action that are being threatened or taken.
Bailiffs (also called enforcement agents)
Bailiffs are also commonly called enforcement agents. In this fact sheet, we refer to them as bailiffs.
- A creditor will not be able to start bailiff action against you whilst you are in breathing space.
- A bailiff is not allowed to try to take control of your goods whilst you are in breathing space.
- If a bailiff has already taken goods from your property, they will still be able to sell these. However, the bailiff cannot charge for the storage of these goods during or after the breathing space.
If a bailiff takes any action whilst you are in breathing space, show them your breathing space confirmation and contact your debt adviser for advice.
Bailiffs can be involved in collecting a variety of debts. Rules can be different depending on the type of debt they are collecting. For more information see the following fact sheets:
- A creditor will not be able to start court action against you whilst you are in breathing space.
- If a creditor has already started court action, they should not take enforcement action to try and recover money from you.
- A creditor cannot start bankruptcy proceedings against you or issue a statutory demand.
However, if a creditor has already obtained an attachment of earnings order to take money from your wages, breathing space will not stop this. For more information see the following fact sheets:
- If you rent your home, in most cases your landlord will not be able to start court action to evict you for rent arrears whilst you are in breathing space.
- If you have a mortgage, in most cases your mortgage lender will not be able to start court action to repossess your home whilst you are in breathing space.
You will be expected to maintain your usual ongoing mortgage or rent payments during breathing space.
In most cases, your energy supplier will not be able to disconnect your gas or electricity whilst you are in breathing space.
Your energy supplier will not be allowed to fit a prepayment meter to take payments towards the debt whilst you are in breathing space.
You need to keep paying your ongoing energy bills during breathing space.
For more information about dealing with energy arrears see our Gas and electricity arrears fact sheet.
Harassment and complaints
Creditors, including debt collection agencies, should not contact you to ask for payment whilst you are in breathing space.
If you feel you are being contacted unreasonably by your creditor, see our Harassment by creditors fact sheet.
Some creditors will still have a legal obligation to send letters under the Consumer Credit Act 1974 such as a “notice of arrears”. You do not need to reply to these letters, and you are still protected by breathing space.
If a creditor ignores the breathing space protections, tell your debt adviser. They can remind the creditor of their obligations. If appropriate, your debt adviser can tell the Insolvency Service what has happened.
You can also make a complaint to the creditor yourself and take your complaint to the relevant ombudsman if you are unhappy or don’t get a response.
- For most credit debts you can take your complaint to the Financial Ombudsman Service if needed. See our Complaining about your lender fact sheet for more information.
- For complaints about the council, you can take a complaint to the ombudsman. If your complaint is about a council in England, you can complain to Local Government and Social Care Ombudsman. If your complaint is about a council in Wales, you can complain to the Public Services Ombudsman in Wales.
- For complaints about your energy provider, you can take complaints to the Energy Ombudsman if needed.
If you are not sure who you should complain or take your complaint to, ask for a copy of the creditor’s complaints process.
You may be having deductions taken from your benefits for a particular debt, such as a benefit overpayment or energy arrears. These are often called third-party deductions.
- If you receive Universal Credit, these deductions will continue even if the debt is eligible for breathing space. New deductions will also be possible.
- If you receive Income-based Jobseeker's Allowance, Income-related Employment and Support Allowance, Income Support, Housing Benefit, Child Tax Credit or Working Tax Credit, then these deductions should stop if the debt is eligible for breathing space. New deductions will not be possible. Check with your creditor whether the deductions will stop.
You may be paying some important debts through a deduction from your benefits, such as rent arrears. Breathing space may stop the deduction. If you want to carry on making the payment, you'll need to speak to your creditor and arrange another way of making payment.
Continuing with payments will be especially important if, for example, you have an arrangement to pay rent arrears through court. Contact us for more advice if you're unsure about this.
You may have a third-party deduction for some ongoing payments rather than repaying a debt, these deductions can continue for rent, fuel and water. Check with your creditor if you are unsure what your deductions are for.
If you are having a deduction made from your Universal Credit to repay a Universal Credit advance, these deductions will continue as Universal Credit advances are currently not eligible debts for breathing space. See the Which debts can’t be included in breathing space section for the list of debts which are not eligible
Time limits for recovering debts
If you have debts which you have not paid or talked to your creditor about for a long time, it might be the case that these debts will soon become “statute barred”. This means the lender has run out of time to make a court claim to recover the debt.
See our Statute-barred debts fact sheet for more information.
If you have a debt which is due to become statute-barred whilst you are in breathing space, the time limit for the creditor to start a court claim will be extended for eight weeks after the breathing space finishes.
If you have a debt which is soon to become statute-barred, you will need to be careful not to acknowledge the debt. It is not clear, at the moment, whether applying for breathing space is treated as an acknowledgement of the debt or not. If it is, your creditor will usually have another six years to start their court claim.
If you have a debt which you think may be statute-barred or may soon become statute-barred and you are thinking about applying for breathing space, contact us for advice.
What you must do during standard breathing space
There are some things you normally must do when you are in breathing space. Your debt adviser will contact you during breathing space to see if you are meeting these requirements.
If you aren’t able to meet these requirements, it may mean your debt adviser will cancel your breathing space and your creditors will be able to collect the debt as usual. However, this up to your debt adviser.
If you are unable to pay your ongoing liabilities because you can’t afford them, it is unlikely your breathing space will be cancelled. Speak to your debt adviser.
Pay your ongoing liabilities
Whilst in breathing space you must make payments to your ‘ongoing liabilities’ if you can. Ongoing liabilities are generally payments that you must make and are not eligible for breathing space. Ongoing liabilities are covered in detail below
Your mortgage and/or secured loan payment
You will need to keep paying the contractual monthly payment on your mortgage or other secured lending on your home. You do not have to pay anything towards any arrears that you may have. However, it may be a good idea to make some payments if you can. Discuss this with your debt adviser.
Your rent or lease payment on your property
You will need to maintain the contractual monthly payment on the rent or lease on your property. You do not have to pay anything towards any arrears that you may have. However, it may be a good idea to make some payments if you can. Discuss this with your debt adviser.
Council tax and business rates
If your council tax bill or business rates are still being paid in monthly instalments, you must try to continue to pay these. If your council has issued a reminder notice or the bill for the whole year has become due, you do not need to continue to make payments. Speak to your debt adviser if you are unsure about whether you need to continue with payments.
Water, electricity, gas and other fuel
You should continue to pay ongoing usage for your energy and water supplies. You do not have to pay anything towards any arrears that you may have. However, it may be a good idea to make some payments if you can. Discuss this with your debt adviser.
Taxes, duties and National Insurance contributions
If you need to pay your own taxes, duties and National Insurance contributions, you will need to keep paying these.
- If you are employed, income tax and National Insurance will be taken from your wages as normal.
- If you are self-employed, you’ll need to contact Business Debtline. If you have arrears, they can discuss the best way to deal with these.
If you have any insurance agreements such as life insurance or contents insurance, you will need to keep paying these.
Inform your debt adviser of any change in your circumstances
You will need to inform your debt adviser of any change in your circumstances such as a new job or a change in your income.
Taking out more credit
You must not borrow more than £500 when you are in breathing space.
Keep in touch with your debt adviser
Your debt adviser will want to know that you are taking steps to resolve your debt situation whilst in breathing space. It’s important to try to keep in touch as this is part of the requirements of breathing space. This could include replying to an email, phone call, or seeing your adviser face-to-face.
How to apply for standard breathing space
You will need to speak to a debt adviser to be considered for breathing space. We are able to apply for breathing space for you. If it appears that breathing space may be a good option and you wish to apply, we will need the following information:
- your name;
- your date of birth;
- your usual residential address; and
- details of who you owe money to.
If you are self-employed, we will also need the trading name of your business and the address of your business, if there is one.
It would be useful to have as much information about each debt as possible. This includes:
- the creditor’s address;
- the account or reference number; and
- details of any collection agency or enforcement agent collecting the debt.
What is a mental health crisis breathing space?
You can only get a mental health crisis breathing space in very limited situations. A mental health crisis breathing space provides protection from creditors for people who are struggling with debts and who are also receiving mental health crisis treatment. Someone is classed as receiving mental health crisis treatment if they are:
- detained for assessment or treatment under the Mental Health Act 1983;
- removed to a place of Safety under the Mental Health Act 1983; or
- receiving crisis, emergency or acute care or treatment in any setting from a specialist mental health service. (this would be a mental health service provided by a crisis home treatment team, a liaison mental health team, a community mental health team or any other specialist mental health crisis service).
An approved mental health professional (AMHP) will need to confirm that you are receiving mental health crisis treatment. An AMHP will be someone approved under section 114(1) of the Mental Health Act 1983 by any local social services authority in England, or approved under that subsection by any local social services authority in Wales.
You can make a referral yourself, but an evidence form signed by an approved mental health professional will need to be submitted with your application.
Mental Health and Money Advice has more information about mental health breathing space, including who would qualify. The Money and Pensions Service has more information about how to submit a referral for a mental health crisis breathing space.
Important things to know
- A mental health crisis breathing space will provide you with the same protections as the standard breathing space.
- A mental health crisis breathing space will last for the duration of your mental health crisis treatment plus 30 days.
- Unlike a standard breathing space, people who wish to enter a mental health crisis breathing space will not need to receive advice and find a debt solution.
- You can choose someone to talk to the debt adviser for you.
- There is no limit to the number of times that you can enter a mental health crisis breathing space. You can also apply if you have had a standard breathing space in the last 12 months
See our Debt and mental health fact sheet for more information about mental health and dealing with your debts.