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60 day ‘breathing space’ period for people with problem debt

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19/06/2019
People struggling with problem debt will be given a 60-day grace period before having to pay further interest or facing enforcement action, under government plans coming into force from 2021.

The 60-day Breathing Space period will protect people with debt problems, while those in mental health crisis will get further protections while they receive treatment.

The scheme will cover a range of debts including arrears owed to central and local government, meaning council tax arrears, personal tax debts and benefit overpayments will be included.

During the grace period, individuals must engage with professional debt advisers to find a long-term solution to their debts and get back on track with payments.

However, individuals receiving NHS treatment for mental health problems will not need to seek debt advice during the 60 days. The Breathing Space protection will last for the whole of their treatment.

City minister, John Glen, said: “Problem debt can have a devastating impact of people’s lives, putting a huge burden on individuals which can lead to family breakdown, stress and mental health issues.

No one should be stuck in an endless cycle of debt and facing the ever-looming threat of invasive debt collectors.”

Helen Undy, chief executive of the Money and Mental Health Policy Institute, said: “This scheme could genuinely save lives. Everyone experiencing a mental health crisis should have the opportunity to recover free from escalating debt fees, charges and the threat of bailiffs arriving at their door.

“We are delighted that the government acted on our call to protect people from being hassled about debts while they’re receiving crisis care, and we look forward to working with ministers to put these plans in place over the coming year.”

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