The government has launched a new scheme to give those struggling with debts 60 days to get their finances back on track.
The ‘Breathing Space’ scheme will provide legal protections for people from their creditors for 60 days, with most interest and penalty charges frozen, and enforcement action halted.
Under the scheme, they will also receive professional debt advice to design a plan which helps to get their finances back on track.
These protections will be available for people in mental health crisis treatment – for the full duration of their crisis treatment plus another 30 days.
The government expects 700,000 people to benefit in the first year of the scheme.
‘This scheme will give people a breathing space from charges, distressing letters and bailiff visits, so they can tackle their problem debt with support from a professional debt advisor,’ said economic secretary to the Treasury, John Glen.
‘And to help people going through a mental health crisis, which is too often linked to financial problems, we’re bringing in stronger protections lasting beyond the end of their crisis treatment.’
Martin Lewis, founder of MoneySavingExpert.com and the Money and Mental Health Policy Institute, added: ‘Debt is far more than just a financial issue. It’s a major cause of relationship breakdown, can hugely diminish people’s well-being, and sadly leaves 100,000s at risk of taking their own lives. That’s why Breathing Space is so important. It’s a win-win-win; for individuals who get their finances back on track, creditors who’ll recoup more cash in the long run, and the economy as there will be less financial catastrophe.
‘I’m especially thrilled that our Money and Mental Health Policy Institute suggestion for Recovery Space is coming into fruition as part of this. That means from now on, everyone receiving NHS crisis care for their mental health can recover without being hassled for escalating debt, fees and charges. Finally, people returning home after being hospitalised for their mental health, can do it safe in the knowledge there’s no threat or reality of bailiffs knocking.’