Debt Respite Scheme: 60-Day Breathing Space Explained

What Is the Debt Respite Scheme?

The debt respite scheme — formally called Breathing Space — gives people in England and Wales up to 60 days of legal protection from creditor action while they work with a debt adviser to find a way forward. During that period, most creditors must pause enforcement, stop adding interest and charges, and halt collection contact on qualifying debts.

The scheme was introduced on 4 May 2021 under the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020. It is administered through the government's Insolvency Service and is only available in England and Wales — Scotland and Northern Ireland have separate arrangements.

There are two types of Breathing Space: the standard moratorium, which lasts 60 days, and the mental health crisis moratorium, which lasts for the duration of a person's mental health crisis treatment plus 30 days after it ends. Both types are explained in this overview.

How the Standard Breathing Space Works

To enter a standard Breathing Space, a person must apply through a debt adviser who is authorised to offer the scheme. This includes advisers at StepChange, Citizens Advice, National Debtline, and MoneyHelper, as well as FCA-regulated debt advice firms. The application cannot be made directly with the Insolvency Service — it must go through an approved intermediary.

Once an adviser submits the application and it is accepted, the moratorium is registered with the Insolvency Service. Creditors and enforcement agents included in the Breathing Space are then legally required to:

• Pause enforcement action (including bailiff visits and County Court proceedings)
• Stop adding interest, fees, and charges to qualifying debts
• Halt direct contact about the debt with the person in Breathing Space
• Not contact a third party about the debt without the adviser's permission

The 60-day period begins from the date the moratorium is registered. During this time, the adviser works with the applicant to identify a sustainable debt solution — such as a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), Debt Relief Order (DRO), or bankruptcy.

Who Is Eligible for Breathing Space?

According to GOV.UK, a person is eligible for the standard debt respite scheme if they:

• Are an individual (not a business or company)
• Are ordinarily resident in England or Wales
• Have at least one qualifying debt
• Are not subject to a current bankruptcy order, Individual Voluntary Arrangement, Debt Relief Order, or Debt Repayment Plan
• Have not had a Breathing Space moratorium within the previous 12 months

The adviser who submits the application must be satisfied that the person is genuinely struggling to repay their debts and that Breathing Space is appropriate. The scheme is not intended as a short-term delay tactic — it is designed to give people space to access a formal debt solution.

There is no minimum or maximum debt level to qualify, and no income threshold. The focus is on whether the person has problem debt that they cannot manage without advice and protection from creditor pressure.

Which Debts Are Covered?

Most personal debts qualify for inclusion in a Breathing Space. According to GOV.UK, qualifying debts include:

• Credit cards and store cards
• Personal loans and overdrafts
• Utility arrears (gas, electricity, water)
• Council tax arrears
• Rent arrears (private landlord or housing association)
• HMRC debts (income tax, National Insurance, VAT)
• Benefit overpayments
• Payday loans and buy-now-pay-later agreements

Some debts are excluded from the scheme and cannot be included even if the person qualifies overall. These include secured debts (such as a mortgage or secured loan, though mortgage arrears may qualify), debts arising from fraud, certain court fines, child maintenance, and student loans. A debt adviser can confirm exactly which debts in an individual's situation are eligible.

The Mental Health Crisis Moratorium

People receiving treatment for a mental health crisis have access to an extended version of the scheme: the mental health crisis moratorium. This version has no fixed end date — it lasts for as long as the person is in mental health crisis treatment, plus a further 30 days after treatment ends.

To qualify, the applicant must be receiving treatment from a mental health professional, and that professional must confirm the person's status to the debt adviser managing the application. The same range of debts is covered, and the same creditor obligations apply — interest frozen, enforcement paused, contact halted.

Unlike the standard moratorium, the mental health crisis moratorium does not have the 12-month restriction on repeat use. If a person goes through repeated mental health crises that require treatment, they may be eligible for more than one moratorium over their lifetime, subject to the ongoing treatment condition being met.

During a mental health crisis moratorium, creditors can apply to the Insolvency Service to have a debt reviewed if they believe it has been incorrectly included — but they cannot take enforcement action while the moratorium is live.

What Breathing Space Does Not Do

It is important to understand the limits of the debt respite scheme. Breathing Space is a temporary pause, not a debt solution in itself. At the end of the 60 days (or the mental health moratorium period), all debts remain unless a formal solution has been arranged.

The scheme does not stop a landlord applying for a possession order where rent arrears exist — it pauses enforcement of that order but does not remove the landlord's right to apply. It also does not prevent a lender from registering a County Court Judgment (CCJ) in some circumstances, though enforcement of any judgment obtained is paused.

Breathing Space also does not apply to joint debts unless the co-debtor is also included in a moratorium. A creditor can still pursue a joint account holder who is not in Breathing Space for the full balance.

Perhaps most importantly, if the person in Breathing Space does not engage with their debt adviser during the 60 days, the adviser has the power to cancel the moratorium early. Active engagement with the advice process is a condition of the scheme remaining in force.

How to Apply for the Debt Respite Scheme

Applications for Breathing Space must be made through an approved debt adviser — the scheme cannot be accessed directly by members of the public via the Insolvency Service. Free debt advice organisations including MoneyHelper, StepChange, Citizens Advice, and National Debtline are all authorised to submit Breathing Space applications on behalf of clients.

The process typically involves an initial debt advice session, during which the adviser reviews all the debts, assesses eligibility, and — if appropriate — registers the moratorium with the Insolvency Service. Once registered, the creditors included in the Breathing Space are notified, and their obligations under the regulations take effect immediately.

During the 60 days, the adviser will typically work with the person to identify whether a formal debt solution (such as a DRO, IVA, DMP, or bankruptcy) is suitable. If a formal solution is put in place before the 60 days expire, the Breathing Space may end early because it has achieved its purpose.

People who want to access Breathing Space through an FCA-regulated debt advice firm — rather than the free-sector charities — can also do so. UK Debt Team refers people to FCA-regulated firms on its panel who can assess eligibility and, where appropriate, submit a Breathing Space application on the client's behalf.

Common Questions About the Debt Respite Scheme

Can a creditor still take me to court during Breathing Space?

According to the regulations, creditors included in a Breathing Space moratorium are prohibited from starting new enforcement action — including court proceedings — for qualifying debts during the moratorium period. If a County Court claim has already been issued before Breathing Space begins, enforcement of any resulting judgment is paused, though the claim itself may continue in some circumstances. A debt adviser can clarify the position for a specific situation.

Does Breathing Space affect a credit file?

The Breathing Space moratorium itself does not appear as a separate entry on a credit file in the same way that an IVA or bankruptcy does. However, any defaults or missed payments on the debts included in the scheme will already have been recorded — Breathing Space does not remove those. The scheme is not currently recorded on the credit reference database as a distinct marker.

What happens if the 60 days run out before a solution is found?

If the moratorium expires without a formal debt solution in place, creditors can resume normal collection activity — including adding interest and taking enforcement steps — from the day after the moratorium ends. The frozen interest from the 60-day period is not reinstated. Someone in this position would need to either negotiate directly with creditors, seek an extended payment arrangement, or enter a formal insolvency process such as a DRO, IVA, or bankruptcy to resolve the debts.

Is Breathing Space available in Scotland or Northern Ireland?

No. The Debt Respite Scheme (Breathing Space) applies only in England and Wales. Scotland has its own debt management framework — including the Debt Arrangement Scheme (DAS) — which operates under different rules. Northern Ireland also has separate insolvency legislation. Someone living in Scotland or Northern Ireland should contact a local debt adviser who can explain the equivalent protections available in their jurisdiction.