On 18 November 2020, there was published on the legislation.gov.uk website, The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

HM Government has issued two consultations on the debt respite scheme. First, a call for evidence ran between October 2017 and January 2018. HM Government’s response was published in June 2018. Over 80 unique responses were received. Most respondents were supportive. Many respondents suggested that individuals in problem debt should have to seek debt advice before entering a breathing space, although some noted that there were certain, unique cases where this could be inappropriate, with individuals experiencing mental health crises highlighted as an example. HM Government consulted on a policy proposal informed by responses to the call for evidence between October 2018 and January 2019, publishing its response in June 2019. Over 130 responses were received.

The key points raised by these respondents are summarised in HM Government’s consultation response document. A wide range of views were expressed on a very large number of issues such as: the duration of a moratorium, the initial eligibility criteria, ongoing eligibility criteria, which debts should be included in the policy, whether there should be a public register of people in breathing space, the treatment of business debts, and other questions. Most respondents were supportive, for example of the eligibility criteria and of the proposed protections for debtors.

The statutory instrument establishes the first part of a debt respite scheme for people in problem debt. This part gives eligible people in problem debt who receive professional debt advice access to a 60-day period in which interest, fees and charges are frozen and enforcement action is paused. This moratorium period is often referred to as ‘Breathing Space’. For people receiving mental health crisis treatment, this instrument establishes an alternate route by which the protections of a moratorium may be accessed and ensures that the protections are in place for the duration of their crisis treatment.

The second part of the scheme is the Statutory Debt Repayment Plan (SDRP), a statutory agreement that will enable a person in problem debt to repay their debts to a manageable timetable, with legal protections from creditor action for the duration of their plan. As set out in the June 2019 consultation response HM Government intends to implement the SDRP over a longer timeframe and has not yet set a specific implementation date for this part of the scheme.