Breathing Space: How to Apply and What It Does

What Breathing Space Actually Does

If debts have reached a point where creditor letters, calls, or threatened enforcement action are making it difficult to think clearly, Breathing Space is a statutory scheme that can pause that pressure. It was introduced in England and Wales in May 2021 under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

During a Breathing Space, most creditors are legally required to stop charging interest and fees, stop applying penalties, and stop or pause any enforcement action. The purpose is to give someone in serious financial difficulty a period of stability — typically 60 days — during which they can engage with a debt adviser and work out a longer-term plan.

Breathing Space does not write off debts or automatically resolve them. The underlying amounts still exist and will need to be dealt with after the moratorium ends. What it does is create a legally protected window to do that without creditors adding to the pressure.

The Two Types of Breathing Space

There are two separate forms of the scheme, and they work differently.

Standard Breathing Space

This is available to anyone with problem debt who is not already in a formal insolvency process (such as bankruptcy or an IVA) and who is not already in a Mental Health Crisis Moratorium. It lasts for 60 days from the date it is registered. During those 60 days, qualifying creditors cannot charge interest or fees, cannot apply penalties, and cannot take or continue most forms of enforcement action.

To access a Standard Breathing Space, the application must go through a debt adviser who is authorised by the FCA or is a local authority. Individuals cannot apply directly to the Insolvency Service themselves — a regulated intermediary must submit the registration on their behalf.

Mental Health Crisis Moratorium

This type is available to people who are receiving mental health crisis treatment. According to GOV.UK, it lasts for the full duration of the person's mental health crisis treatment, plus 30 days afterwards. There is no fixed 60-day cap.

To access a Mental Health Crisis Moratorium, an approved mental health professional (AMHP) must provide evidence that the person is receiving crisis treatment. The debt adviser then registers the moratorium using that evidence. This type of Breathing Space does not require the debtor to engage with debt advice during the protection period, which reflects the circumstances under which it applies.

Who Qualifies for Breathing Space

According to GOV.UK, to be eligible for a Standard Breathing Space a person must:

• Live in England or Wales (the scheme does not apply in Scotland or Northern Ireland, which have separate arrangements)
• Have at least one qualifying debt
• Not already be subject to a Debt Relief Order (DRO), bankruptcy, or Individual Voluntary Arrangement (IVA)
• Not have had a Standard Breathing Space in the last 12 months
• Not be subject to a Debt Repayment Plan under the Debt Arrangement Scheme

Most common consumer debts qualify, including credit card balances, personal loans, overdrafts, utility arrears, council tax arrears, and rent arrears. Some debts are excluded — for example, secured debts such as mortgages are not paused during Breathing Space, though enforcement action related to them may be affected in certain circumstances. Court fines and child maintenance are also excluded from the protections.

There is no minimum or maximum debt level stated in the regulations. The determining factor is whether a regulated debt adviser concludes that Breathing Space is an appropriate step given the person's circumstances.

How the Application Process Works

Because individuals cannot apply directly, the process begins with contacting a debt adviser who is FCA-authorised or is a local authority debt adviser. Free debt advice is available from organisations including StepChange, MoneyHelper, Citizens Advice, and National Debtline — all of which can assess eligibility and, where appropriate, register a Breathing Space.

Step 1 — Initial Debt Advice Session

The debt adviser will review the person's financial situation — income, outgoings, assets, and the nature and scale of debts. This is not just a box-ticking exercise: the adviser must form a view that Breathing Space is appropriate and that the person is genuinely unable to repay their debts or is at risk of being unable to do so.

Step 2 — Registration on the Insolvency Service Portal

If the adviser considers Breathing Space appropriate, they register the moratorium through the Insolvency Service's online portal. The registration includes details of the debtor and all qualifying debts. The Insolvency Service then notifies creditors — this notification is what triggers the legal protections. Breathing Space begins on the date of registration, not the date creditors are notified.

Step 3 — Creditor Notification and Compliance

Once notified, qualifying creditors must stop adding interest, fees, and penalties to the debts listed. They must also pause or stop enforcement action. According to the regulations, creditors have a limited window in which they can object to a Breathing Space if they believe there has been an error — for example, if a debt has been incorrectly listed or the debtor does not meet the eligibility criteria.

Step 4 — Midpoint Review (Standard Moratorium)

For a Standard Breathing Space, the debt adviser must carry out a midpoint review — at around day 30 — to check that the debtor is engaging with the advice process and that the moratorium remains appropriate. If the debtor stops engaging or their circumstances change materially, the adviser can cancel the Breathing Space early.

What Creditors Must and Cannot Do During Breathing Space

The legal obligations on creditors during a moratorium are set out in the 2020 Regulations. During the protected period, a creditor with a qualifying debt must not:

• Charge interest, fees, or penalties on the listed debt
• Take enforcement action — including instructing bailiffs, applying for a charging order, or pursuing a county court judgment (CCJ)
• Contact the debtor for the purpose of collecting the debt
• Sell the debt to another creditor (subject to limited exceptions)

It is worth noting that existing county court judgments are not automatically set aside by Breathing Space — enforcement of them is paused, but the judgment itself remains on record. Mortgage payments also remain due during the moratorium; the scheme does not suspend the obligation to pay secured debts, though repossession proceedings may be affected.

If a creditor continues to contact the debtor or add charges during a registered moratorium, this is a breach of the regulations. The Insolvency Service is the appropriate body to raise concerns with, and the debt adviser managing the case can also intervene.

What Happens After Breathing Space Ends

When the 60-day Standard Breathing Space expires, the protections lift. Interest and charges can resume from that point — creditors cannot retrospectively add back the interest that was frozen during the moratorium, but they can start charging again going forward.

The intention of the scheme is that the 60-day window is used productively. In practice, that means working with the debt adviser to identify a longer-term solution — which might be a Debt Management Plan (DMP), a Debt Relief Order (DRO), an Individual Voluntary Arrangement (IVA), bankruptcy, or simply a negotiated repayment arrangement with creditors.

Breathing Space itself does not determine what happens next. It creates the protected space to have that conversation and reach a considered decision, rather than being forced into a hasty choice under creditor pressure.

Breathing Space in Scotland and Northern Ireland

The Debt Respite Scheme described above applies only in England and Wales. Scotland operates a different framework through the Debt Arrangement Scheme (DAS), which is administered by Accountant in Bankruptcy and provides its own protections for people on a Debt Payment Programme. Northern Ireland has separate debt legislation and the Breathing Space regulations do not extend there. Anyone based in Scotland or Northern Ireland seeking similar protection should speak to a regulated debt adviser familiar with the rules in their jurisdiction.

Common Questions About Breathing Space Applications

Can someone apply for Breathing Space more than once?

A Standard Breathing Space cannot be registered for someone who has had one in the previous 12 months. This 12-month restriction does not apply to the Mental Health Crisis Moratorium, which can be accessed whenever the eligibility criteria are met.

Does Breathing Space affect a credit file?

The Breathing Space register maintained by the Insolvency Service is publicly searchable, though it is not widely used by the general public. The moratorium itself is not automatically recorded on a credit file in the same way that a CCJ or insolvency order would be — however, the underlying debts and any missed payments will already be recorded separately. Anyone concerned about the credit impact of their situation should discuss this with their debt adviser.

Can a landlord evict someone during Breathing Space?

The regulations place some restrictions on eviction proceedings where rent arrears are a qualifying debt. However, the position on evictions is complex and depends on the specific circumstances. Regulated debt advice should be sought for clarity on any housing-related aspects.

What if a creditor breaches the moratorium?

If a creditor continues enforcement action or adds charges after being notified of a registered Breathing Space, this is a breach of statutory regulations. The debt adviser managing the case should be informed immediately, and a complaint can be raised through the Insolvency Service. Creditors who breach a moratorium may face court action.