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What Breathing Space Is and Why It Was Introduced
When debts become unmanageable, the pressure of creditor letters, phone calls, and enforcement threats can make it almost impossible to think clearly about next steps. The Breathing Space scheme — formally known as the Debt Respite Scheme — was introduced in England and Wales in May 2021 specifically to address that problem. It creates a legally protected period during which most enforcement action and interest charges are paused, giving someone in financial difficulty time to engage with a debt adviser without the situation escalating further.
The rules are set out in the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, which came into force on 4 May 2021. According to GOV.UK, the scheme applies only in England and Wales — Scotland and Northern Ireland have separate debt legislation.
There are two types of Breathing Space: the Standard Breathing Space and the Mental Health Crisis Breathing Space. Both work in broadly the same way, but the Mental Health Crisis version has different rules around duration and eligibility.
Standard Breathing Space: The Key Rules
A standard Breathing Space lasts for 60 days. During that period, creditors covered by the scheme are legally required to stop most enforcement action, pause adding interest and charges, and halt contact aimed at collecting the debt. The moratorium is registered with the Insolvency Service, which maintains an official record accessible to creditors.
To apply, a person must be struggling with problem debt and must contact a regulated debt adviser — either through a free-sector organisation or an FCA-authorised firm. The adviser assesses eligibility and, if the person qualifies, registers the Breathing Space on their behalf. Individuals cannot apply directly to the Insolvency Service themselves.
Who Is Eligible?
According to GOV.UK, to be eligible for a standard Breathing Space a person must:
- Live or usually reside in England or Wales
- Have qualifying debt (see below)
- Not currently be in a Debt Relief Order (DRO), Individual Voluntary Arrangement (IVA), bankruptcy, or a Debt Management Plan administered by an FCA-authorised firm that already includes all their debts
- Not have had a standard Breathing Space in the previous 12 months
The regulated adviser assesses these conditions before registering the moratorium. If someone does not meet the criteria, the adviser will explain what alternatives may be relevant to their circumstances.
Which Debts Are Covered?
Most personal debts qualify, including credit cards, personal loans, overdrafts, utility bill arrears, council tax arrears, rent arrears, and HMRC debts. The scheme covers the vast majority of consumer debt that people typically struggle with.
However, some debts are excluded by regulation. These include secured debts (such as a mortgage, where the property itself is the security), ongoing criminal fines, debts arising from a personal injury claim, and certain student loan obligations. A regulated adviser can confirm which of a person's specific debts fall within or outside the scheme.
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Mental Health Crisis Breathing Space
The Mental Health Crisis Breathing Space works differently from the standard version in two important respects. First, it lasts for the entire duration of a person's mental health crisis treatment, plus 30 days — meaning there is no fixed 60-day cap. Second, it can be applied for repeatedly; there is no restriction on how many times someone can use it, provided they are receiving mental health crisis treatment each time.
To qualify, a person must be receiving treatment from an Approved Mental Health Professional (AMHP). The AMHP confirms the person's crisis status to the debt adviser or can directly contact a debt advice provider to start the process. According to GOV.UK, the debt adviser then registers the moratorium with the Insolvency Service in the same way as a standard Breathing Space.
What Creditors Must — and Must Not — Do During Breathing Space
Once a Breathing Space is registered, creditors with qualifying debts are subject to strict legal obligations under the 2020 Regulations. According to GOV.UK, they must:
- Stop all enforcement action on the covered debts
- Pause adding interest, fees, penalties, and charges to qualifying debts
- Refrain from contacting the debtor to collect the debt
- Not apply to court for a judgment in relation to a qualifying debt (unless already in progress)
- Not instruct bailiffs or enforcement agents in relation to the debt
Creditors are notified automatically when a Breathing Space is registered. If a creditor continues to pursue enforcement action after notification, they are acting outside the legal framework set by the Regulations. In that situation, the regulated debt adviser managing the case can contact the Insolvency Service to address the breach.
It is worth noting that some obligations continue during Breathing Space. For example, ongoing mortgage payments, rent due after the moratorium starts, and utility bills as they arise are not covered by the protection — the moratorium applies to arrears and debts that already exist at the point of registration, not to liabilities incurred after that date.
What Happens During the 60-Day Period
The intention of Breathing Space is not simply to pause debt collection indefinitely — it is to create the time and conditions for someone to work with a debt adviser and put a longer-term solution in place. During the 60 days, the regulated adviser will typically review the full picture of a person's debts and income, and discuss which formal or informal debt solutions might be appropriate to their circumstances.
If the person is found to be eligible for a Debt Relief Order (DRO), an IVA, a Debt Management Plan, or another arrangement, the adviser will explain how each of those works so that an informed decision can be made before the Breathing Space ends. The moratorium itself does not resolve the debts — it creates the space to do so.
The debt adviser reviewing the case has an ongoing duty to check that the person still meets the eligibility criteria throughout the 60 days. If circumstances change significantly — for example, if the person's financial position improves materially — the adviser may cancel the Breathing Space early. A creditor can also apply to the Insolvency Service to have the moratorium cancelled if they believe the person does not qualify or the rules are not being followed correctly.
How Breathing Space Compares to Other Formal Debt Options
Breathing Space sits alongside — rather than instead of — the main formal debt solutions available in England and Wales. It is a temporary moratorium, not a resolution in its own right. The formal routes that a debt adviser might discuss during a Breathing Space period include:
- Debt Relief Order (DRO): Suitable for people with low income and assets under £2,000, with qualifying debts up to £50,000 (as of June 2024). Debts can be written off after 12 months.
- Individual Voluntary Arrangement (IVA): A legally binding agreement between a person and their creditors, typically lasting five or six years, managed by a licensed Insolvency Practitioner.
- Bankruptcy: A formal insolvency process that can write off debts but has significant implications for assets and credit records.
- Debt Management Plan (DMP): An informal arrangement to repay debts at a reduced rate. Not legally binding, but commonly used for people who can afford some repayment.
Each of these options has its own eligibility criteria, costs, and consequences. A regulated debt adviser can explain how each one works in general terms so that the person involved can make an informed choice.
How to Access Breathing Space
The only route into Breathing Space is through a regulated debt adviser. According to GOV.UK, this includes debt advisers at charities and free-sector organisations as well as FCA-authorised firms. The process involves an initial conversation about debts, income, and outgoings. If the adviser determines a person is eligible, they register the moratorium with the Insolvency Service and notify the relevant creditors.
Free debt advice — including access to Breathing Space registration — is available from MoneyHelper (moneyhelper.org.uk), StepChange Debt Charity (stepchange.org), Citizens Advice (citizensadvice.org.uk), and National Debtline (nationaldebtline.org). These organisations provide regulated debt advice at no cost to the person seeking help.
For those who prefer to speak to an FCA-authorised firm in the private sector, UK Debt Team can connect people with regulated debt advice specialists through its referral panel. UK Debt Team is an introducer, not a debt adviser — it does not assess individual cases or provide regulated advice itself, but routes enquiries to firms that do.