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News analysis: ‘Breathing space’ rules for debtors come into force
Up to 700,000 people should benefit from the changes, which allow a 60-day grace period, as figures show mental health has suffered during the pandemic
By Leah Milner 12
th May 2021 2:42 pm
Landlords, mortgage lenders and other creditors will need to comply with new rules that came into force this month requiring them to offer ‘breathing space’ to tenants or borrowers with debt problems.
The government estimates that up to 700,000 people will benefit from the changes, which allow them a 60-day grace period to put a payment plan in place without interest and fees piling up, letters chasing them for payment or enforcement action being taken. Those who are suffering from acute mental-health issues will have the duration of their crisis treatment plus 30 days.
Reforms ‘will make it easier for people with debt problems to get a fresh start’ May 10, 2021, 2:52 pm
Cut up credit cards. More people struggling with their debts across England and Wales will have access to a solution which would give them a fresh start (Owen Humphreys/PA)
More people struggling with their debts across England and Wales will have access to a solution which would give them a fresh start.
The maximum total debts allowable for someone taking out a debt relief order (DRO) will increase from £20,000 to £30,000, the Insolvency Service said.
This will enable more people struggling with their debts to qualify, rather than turning to bankruptcy which is often seen as a “last resort”.
BBC News
By Kevin Peachey
Published
image copyrightGetty Images
A new breathing space scheme has begun in England and Wales to shield people in problem debt from further interest and charges.
People receiving debt advice can apply for the break, which lasts for up to 60 days, to prevent them falling into a spiral of debt.
The Treasury has estimated that up to 700,000 people could be helped by the scheme in its first year.
People receiving treatment for mental health issues can get more help.
The separate system for those receiving mental health crisis treatment lasts for the length of that treatment, plus another 30 days.
People in problem debt get 60-day break scheme
By Kevin Peachey
Published
image copyrightGetty Images
A new breathing space scheme has begun in England and Wales to shield people in problem debt from further interest and charges.
People receiving debt advice can apply for the break, which lasts for up to 60 days, to prevent them falling into a spiral of debt.
The Treasury has estimated that up to 700,000 people could be helped by the scheme in its first year.
People receiving treatment for mental health issues can get more help.
The separate system for those receiving mental health crisis treatment lasts for the length of that treatment, plus another 30 days.