On 26 February 2021, the FCA published Policy Statement 21/1: Breathing Space Regulations – changes to our Handbook (PS21/1). In PS21/1 the FCA sets out the changes it is making to the Handbook to take into account The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (the Regulations), which come into force on 4 May 2021. Specifically the FCA is amending certain parts of the Consumer Credit sourcebook (CONC) and Handbook definitions (new definitions for ‘Debt Respite moratorium’ and ‘moratorium debt’). As proposed in the earlier FCA consultation paper, the FCA is not making changes to its rules or guidance in the Mortgages and Home Finance Conduct of Business sourcebook or CONC 8 (Debt Advice).
The Regulations create a scheme in England and Wales whereby someone in problem debt has the right to legal protections from credit action for a defined period, while they receive debt advice and potentially enter an appropriate debt solution (the moratorium). A consumer can access a 60-day moratorium after being advised and assessed as eligible by an FCA authorised debt advice firm or local authority. There is an alternative mechanism which a consumer receiving mental health crisis treatment may access after being certified by an Approved Mental Health Professional and confirmed as eligible by a debt adviser (the mental health crisis moratorium). There is no 60-day limit to a mental health crisis moratorium period, which usually ends 30 days after the mental health crisis treatment has concluded.