What is Breathing Space?

Breathing Space (officially the Debt Respite Scheme) is a government initiative in England and Wales designed to give people struggling with debt some much-needed time to seek financial advice and consider their options.

For 60 days, your creditors cannot add interest or fees to eligible debts, nor can they take enforcement action. You should continue making your regular payments if you can afford to do so.

There are two types of Breathing Space:

1. Standard Breathing Space – where most creditors must pause enforcement, interest, and charges on eligible debts.
2. Mental Health Crisis Breathing Space (MHCBS) – which offers extra protections for people receiving mental health crisis treatment.

What this article covers

• Who is eligible for Breathing Space
• Qualifying debts
• Debts excluded from Breathing Space
• How the scheme works
• The Mental Health Crisis Breathing Space
• How to apply

Who is Eligible for Breathing Space?

To qualify for Breathing Space, you must:

• Live in England or Wales
• Owe at least one qualifying debt and be unable to repay it on time
• Not already be in a Debt Relief Order, Individual Voluntary Arrangement (IVA), or be an undischarged bankrupt
• Not have had Breathing Space in the last 12 months (unless it was a Mental Health Crisis Breathing Space)

Your debt adviser must also agree that:

• You need time to get debt advice
• You are likely to enter a longer-term debt solution

What Debts Qualify for Breathing Space?

A wide range of debts can be included, as long as they are personal rather than business related.

Arrears on essential bills:

• Rent arrears
• Mortgage arrears
• Gas and electricity arrears
• Water arrears
• Hire purchase arrears
• Council tax or business rates arrears
• Income tax or National Insurance arrears

Non-priority debts:

• Credit cards and store cards
• Bank overdrafts and loans
• Catalogue debts
• Mobile phone arrears
• Loans from finance companies
• Home-collected credit
• Family or personal debts
• Mortgage shortfalls (if your house sells for less than what’s owed)

All eligible debts must be included when applying.

What Debts Are Excluded from Breathing Space?

The scheme does not cover:

• Magistrates’ court fines
• Child maintenance arrears (CSA or CMS)
• Student loans
• Budgeting or crisis loans
• Criminal confiscation orders
• Universal Credit advances
• Debts incurred fraudulently
• Certain personal injury-related debts

Business debts are also excluded if your business is VAT-registered, part of a partnership, or the debt relates solely to the business.

How Does the Breathing Space Scheme Work?

• Breathing Space begins once your adviser submits your application to the Insolvency Service.
• Your creditors will be notified, and must stop collections and enforcement.
• Creditors can challenge the inclusion of debts during the first 20 days.
• New debts cannot be added, but existing debts overlooked in the application can be included later.
• The scheme lasts 60 days, provided you continue to meet the eligibility requirements.
• After it ends, creditors may resume action if the debt isn’t resolved.

If you share a debt with another person, they will also be protected from enforcement action.

What is the Mental Health Crisis Breathing Space?

The Mental Health Crisis Breathing Space (MHCBS) provides stronger, ongoing protections for people receiving mental health crisis treatment.

Key features:

• Lasts throughout your treatment, plus 30 days afterwards
• Offers the same protections as standard Breathing Space
• No requirement to seek debt advice before applying
• No limit on how many times you can enter MHCBS
• You can access it even if you’ve used a standard Breathing Space in the past 12 months

Who can access MHCBS?

You must live in England or Wales, have at least one qualifying debt, and be receiving crisis treatment such as:

• Being sectioned under the Mental Health Act
• Being removed to a place of safety
• Crisis care from a specialist mental health team (e.g. home treatment team or crisis resolution team)

How to Apply for Breathing Space

You can only apply through a debt adviser, who will submit your application to the Insolvency Service if it’s suitable.

You’ll need to provide:

• Your name, date of birth, and address
• Details of who you owe money to
• Reference numbers and creditor details (if available)

It’s free to apply, though some advisers may charge for additional services. Free support is available through organisations such as the Money Advice Service.

Applying for a Mental Health Crisis Breathing Space

You don’t have to apply directly. An Approved Mental Health Professional (AMHP) can certify your treatment and submit evidence to a debt adviser.

Applications can also be made by:

• A carer
• Care co-ordinators
• Mental health nurses
• Social workers
• Independent mental health advocates
• Representatives acting on your behalf

Managing Debt and Car Finance Together

If you’re facing debt challenges, accessing Breathing Space can help take some pressure off while you explore solutions. But needing a car doesn’t stop just because finances are tight.

At Compass Vehicle Services, we understand that many people with poor credit still need a reliable vehicle. That’s why we specialise in bad credit car leasing.

Explore leasing options with Compass Vehicle Services and find the flexibility you need while you manage your finances.