Breathing Space Explained: What It Means for Your Debts

What Does Breathing Space Mean?

If debts are mounting and creditors are applying pressure, many people search for a way to pause the situation and work out what to do next. That is precisely what Breathing Space is designed to offer. Formally known as the Debt Respite Scheme, it is a legal protection introduced in England and Wales in May 2021 that temporarily halts most debt enforcement action, freezes interest, and stops additional charges while someone works with a regulated debt adviser.

Breathing Space is not a debt solution in itself — it does not write off what is owed or restructure repayments. Instead, it creates a protected window of time during which a person can get proper advice without their situation being made worse by escalating fees and creditor contact. According to GOV.UK, the scheme is available to individuals who are struggling with problem debt and are engaging with a regulated debt advice provider.

The Two Types of Breathing Space

There are two distinct versions of the scheme, each with different eligibility requirements and different durations. Understanding which type applies in a given situation is important.

Standard Breathing Space

The Standard Breathing Space lasts for up to 60 days. It is available to any individual with problem debt in England or Wales who applies through a regulated debt adviser — this includes advisers at free services such as StepChange, Citizens Advice, MoneyHelper or National Debtline, as well as FCA-regulated commercial debt advice firms. The adviser registers the Breathing Space on a government-administered service, at which point the protections come into force automatically.

During those 60 days, most creditors are legally required to stop enforcement activity, pause interest and charges on qualifying debts, and cease most contact with the debtor directly about repayment. At the end of the 60-day period, the Breathing Space ends and the person must have arranged a longer-term solution — or face creditors resuming their normal recovery activity.

Mental Health Crisis Breathing Space

The Mental Health Crisis Breathing Space is a separate category with stronger protections. It applies when someone is receiving mental health crisis treatment — such as being detained under the Mental Health Act, receiving crisis-resolution home treatment, or accessing equivalent care. In these cases, the Breathing Space lasts for the full duration of the mental health crisis treatment plus an additional 30 days after treatment ends — meaning it can last considerably longer than 60 days.

This version of the scheme must be applied for through an approved mental health professional (AMHP) or a debt adviser working alongside one. The stronger protections reflect the fact that someone in a mental health crisis is in no position to engage with creditors or make complex financial decisions.

What Debts Are Covered?

Most personal debts qualify for Breathing Space protections, but not all. According to GOV.UK, qualifying debts include:

• Credit cards and store cards
• Personal loans and overdrafts
• Utility bill arrears (gas, electricity, water)
• Council tax arrears
• Mortgage or rent arrears
• HMRC debts including income tax, National Insurance, and VAT (for sole traders)
• Benefit overpayments
• County Court Judgments (CCJs)
• Payday loans and hire purchase agreements

There are some debts that are specifically excluded from the scheme. These include secured debts where a property is at immediate risk of repossession through a possession order already granted, crisis or emergency loans from the government, and certain social fund loans. Child maintenance arrears and debts arising from fraud are also excluded. Even where a debt is excluded from the protections, the Breathing Space can still be registered — the excluded debts simply fall outside the freeze.

What Protections Does Breathing Space Actually Provide?

Once a Breathing Space is registered, creditors with qualifying debts are legally bound by a specific set of restrictions. These are not informal agreements — they are statutory obligations under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

Enforcement and contact paused

Creditors must stop most forms of enforcement action. This means bailiffs cannot be instructed, court proceedings cannot be started or continued, and creditors cannot apply to a court for a charging order or attachment of earnings during the moratorium period. Direct contact about the qualifying debt — such as letters demanding payment or phone calls chasing arrears — must also stop.

Interest and charges frozen

One of the most significant protections is the freeze on interest, fees, penalties and charges on qualifying debts during the moratorium. For people whose debts are growing faster than they can repay them, this alone can make a meaningful difference to their overall balance during the advice period. According to GOV.UK, creditors cannot charge or apply interest to the qualifying debt while Breathing Space is active.

What creditors can still do

Creditors are permitted to continue taking payments that are already scheduled — for example, a direct debit that was in place before the Breathing Space began. They can also contact the debtor about matters unrelated to the debt, and they can contact the registered debt adviser. They are also entitled to apply to have the Breathing Space cancelled if they believe the rules are being abused or circumstances have changed.

Who Can Apply and How?

Any individual in England or Wales who owes a qualifying debt and is struggling to repay it can request a Standard Breathing Space — but they cannot apply directly. The application must go through a regulated debt adviser. This is a deliberate feature of the scheme: the expectation is that the 60-day window is used productively to reach a sustainable plan, not simply to delay.

The adviser will carry out a brief assessment to check that the person is eligible and that Breathing Space is appropriate. They will then register the moratorium with the Insolvency Service's Breathing Space service, and the protections begin. Creditors are notified, though a short delay of around one working day is typical before notification reaches all parties.

There is no minimum debt level required to access Breathing Space, and there is no application fee. The scheme is specifically designed to be accessible to people who may have limited resources and need time to engage with debt advice properly.

Can a Breathing Space be cancelled?

Yes. A debt adviser must review the situation at the midpoint of the 60-day period — around day 25. If the person's circumstances have significantly improved, or if they are not engaging with the advice process, the adviser can cancel the Breathing Space early. Creditors can also apply to the county court to challenge a Breathing Space they believe was registered incorrectly. If cancelled, the protections end immediately.

What Happens When Breathing Space Ends?

Breathing Space is a temporary measure, and it is important to understand what follows. When the moratorium period ends — whether at 60 days, after a longer mental health crisis period, or early — creditors are free to resume normal recovery activity. Any interest and charges that were frozen do not become permanently waived; creditors can start adding them again from the point the moratorium ends, though they cannot retrospectively add charges for the moratorium period itself.

The purpose of the 60-day window is to create enough stability for a person to work with their adviser and move toward a formal debt solution — such as a Debt Management Plan (DMP), an Individual Voluntary Arrangement (IVA), a Debt Relief Order (DRO), or in some cases bankruptcy. The right route depends entirely on individual circumstances, assets, income, and the nature of the debts involved — which is why the involvement of a regulated debt adviser is central to the scheme.

Breathing Space and Scotland

The Debt Respite Scheme as described above applies only in England and Wales. Scotland has its own separate statutory protections for people in debt. The Debt Arrangement Scheme (DAS) is Scotland's equivalent framework, which allows debts to be repaid under a Debt Payment Programme, with creditors prevented from taking enforcement action while a programme is in place. Anyone in Scotland seeking similar breathing-space-style protections should seek advice from a debt adviser familiar with Scots law.

Northern Ireland currently operates under different legislation and does not have an equivalent Breathing Space scheme — residents should seek advice from a regulated adviser who can explain what protections are available there.

Free Debt Advice Available

Breathing Space must be registered through a regulated debt adviser. Free debt advice — including help applying for Breathing Space — is available from the following organisations at no charge:

• MoneyHelper — moneyhelper.org.uk (government-backed)
• StepChange Debt Charity — stepchange.org
• Citizens Advice — citizensadvice.org.uk
• National Debtline — nationaldebtline.org

These services are free of charge and regulated. For those who prefer to speak to a commercial FCA-regulated debt advice firm, UK Debt Team can connect individuals with regulated specialists on its referral panel who can assess their situation and explain the options available — including whether Breathing Space is appropriate as a first step.