Breathing Space: What It Means and Who Qualifies

What Does Breathing Space Actually Mean?

If debt letters, calls, or enforcement action are piling up faster than you can manage them, Breathing Space is a legal protection that puts a temporary pause on most of that pressure. Introduced in May 2021 under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, it gives people in problem debt a legally protected period to get regulated debt advice without creditors chasing them in the meantime.

The term "Breathing Space" is not informal slang — it is the official name for a scheme administered by the Insolvency Service and delivered through FCA-regulated debt advice providers. When someone enters Breathing Space, most of their creditors are legally required to stop enforcement action, freeze interest and charges, and pause any ongoing legal proceedings related to qualifying debts.

There are two types: the Standard Breathing Space, which lasts up to 60 days, and the Mental Health Crisis Breathing Space, which lasts for the duration of a person's mental health crisis treatment plus 30 days after it ends. This page covers both.

The Standard Breathing Space: Key Facts

The Standard Breathing Space is available to individuals in England and Wales who are struggling with personal debt. It can only be started by an FCA-regulated debt adviser or a local authority — a person cannot apply for it directly themselves.

Once in place, the protection lasts for 60 days. During that period, most creditors must:

• Stop applying interest, fees, and penalties to qualifying debts
• Stop enforcement action, including bailiff visits
• Stop or pause any court proceedings related to qualifying debts
• Not contact the person directly to demand payment

According to GOV.UK, the adviser registers the Breathing Space through an online service, and the Insolvency Service notifies creditors. The creditor must comply from the point of notification — they do not have a choice about whether to participate.

Which Debts Are Covered?

Most personal debts qualify, including credit cards, personal loans, overdrafts, council tax arrears, utility bill arrears, rent arrears, and HMRC debts such as income tax and national insurance. According to GOV.UK, some debts are explicitly excluded from the scheme.

Debts that do not qualify for Breathing Space protection include:

• Secured debts where the security is the person's home (for example, a mortgage or secured loan) — though mortgage arrears may be included in some circumstances
• Debts incurred through fraud
• Liabilities under a confiscation order
• Child maintenance arrears
• Student loans
• Crisis loans from the Social Fund

Even for excluded debts, the Breathing Space period may still provide practical relief — because the adviser is working on a debt solution during that time, creditors of qualifying debts are restrained, which can free up income to address non-qualifying obligations.

What Happens to Interest and Charges?

One of the most significant practical effects of Breathing Space is the freezing of interest and charges. Creditors of qualifying debts must stop adding interest, late payment fees, and penalty charges for the duration of the protected period. Any charges already applied during the Breathing Space — if a creditor acted in error — must be repaid to the debtor.

This freeze does not permanently write off the interest; it simply stops the debt from growing while a solution is being worked on. At the end of the 60 days, normal contractual terms resume unless a formal debt solution (such as a Debt Management Plan, IVA, or Debt Relief Order) is in place.

The Mental Health Crisis Breathing Space

The Mental Health Crisis Breathing Space works differently and provides significantly longer protection. It is available to people who are receiving treatment for a mental health crisis — and the definition of "crisis" is set out in the regulations and must be confirmed by an Approved Mental Health Professional (AMHP) or another authorised clinician.

Unlike the Standard version, the Mental Health Crisis Breathing Space:

• Lasts for the entire duration of the mental health crisis treatment, plus 30 days after treatment ends
• Has no fixed maximum duration — if treatment continues for months or longer, the protection continues
• Can only be initiated by an FCA-regulated debt adviser working alongside a mental health professional
• Cannot be cancelled simply because the creditor objects — the grounds for cancellation are narrower than in the Standard version

During a Mental Health Crisis Breathing Space, the adviser is not required to review the case every 30 days in the same way as the Standard version — reducing the administrative burden on the individual at a particularly difficult time.

Who Can Apply — and How?

To enter Standard Breathing Space, a person must be an individual (not a company) living in England or Wales, be in problem debt, and not already be subject to a Debt Relief Order, Individual Voluntary Arrangement, bankruptcy order, or an existing Breathing Space. They must also not have used a Standard Breathing Space in the previous 12 months.

The application process works as follows:

• The individual contacts an FCA-regulated debt advice service
• The adviser assesses eligibility and, if appropriate, registers the Breathing Space via the Insolvency Service's online portal
• The Insolvency Service notifies creditors — typically within a day of registration
• Protection begins from the date of notification to each creditor

During the 60-day period, the adviser continues working with the individual to identify a sustainable debt solution. The Breathing Space is not a debt solution in itself — it is time and space to find one. According to GOV.UK, the adviser must review the case at the 30-day mark to confirm the person is still engaging with the debt advice process. If they have stopped engaging, the Breathing Space can be cancelled.

Can Creditors Cancel a Breathing Space?

Creditors can apply to the Insolvency Service to cancel a Standard Breathing Space, but only on specific grounds set out in the regulations. These include situations where the debtor has assets sufficient to repay the debt, where a debt should not have been included, or where the debtor is not complying with the terms of the scheme (for example, taking on new credit during the protected period is restricted).

A creditor's general preference not to participate is not grounds for cancellation. The scheme is mandatory for creditors of qualifying debts once the Insolvency Service has notified them.

What Breathing Space Does Not Do

It is worth being clear about what Breathing Space is not. It is a temporary pause — not a write-off, not a long-term solution, and not a guarantee of any particular outcome. Once the 60 days end, if no formal debt solution has been put in place, creditors can resume normal collection activity, and interest and charges will start accruing again.

Breathing Space also does not prevent a landlord from starting eviction proceedings for rent arrears — according to GOV.UK, rent arrears are a qualifying debt for the purposes of freezing enforcement, but the scheme does not override landlord possession rights in all circumstances. Similarly, it does not stop a mortgage lender from taking steps to repossess a property in certain situations.

During the Breathing Space, the person is generally expected not to take on additional credit. The regulations restrict certain financial behaviour during the protected period, and breaching these conditions can result in the Breathing Space being cancelled early.

Breathing Space and Formal Debt Solutions

The practical purpose of Breathing Space is to create time and stability for a debt adviser to assess a person's full financial position and identify the most appropriate formal route forward. The options a regulated adviser might explore during the 60 days include:

• Debt Management Plan (DMP): An informal arrangement to repay debts at a reduced rate over time
• Individual Voluntary Arrangement (IVA): A formal insolvency arrangement, typically lasting five or six years, that can result in a portion of debt being written off
• Debt Relief Order (DRO): Available to those with low income, minimal assets, and debts under £30,000 — debts may be written off after 12 months
• Bankruptcy: A formal legal status that can discharge qualifying debts, subject to a one-year period and restrictions

Each of these routes has its own eligibility criteria, costs, and implications — including effects on credit files and, in some cases, assets. A regulated adviser will explain how each works in the context of a person's specific circumstances.

Where to Get Free Debt Advice

Free debt advice — including help to access Breathing Space — is available from the following regulated organisations:

• MoneyHelper (moneyhelper.org.uk) — government-backed money guidance service
• StepChange Debt Charity (stepchange.org) — free debt advice and DMP services
• Citizens Advice (citizensadvice.org.uk) — local and national free advice
• National Debtline (nationaldebtline.org) — specialist free telephone and online debt advice

These organisations are FCA-regulated or authorised to provide debt advice and can initiate a Breathing Space on a person's behalf if appropriate. There is no charge for their advice services.