Government proposes 'breathing space' policy for serious debt

HM Treasury has launched a call for evidence on a proposed “breathing space” policy to help people struggling with serious debt.

First touted in the Conservative’s 2017 manifesto, the “fair debt” policy would allow someone in serious problem debt may apply for legal protection from further interest, charges and enforcement action for a period of up to six weeks. This period would give those affected time to take action by seeking financial advice about how to manage and relieve their debt burden. Where appropriate, they would be offered a statutory repayment plan to help pay back their debts in a manageable way.

You can read the Call for Evidence here, with responses welcome until 16th January 2018.

The Government is issuing this call for evidence to gain further insight from the debt advice sector and creditors about the scale of the issue, and about how best to design, implement, administer and monitor a six-week breathing space scheme and statutory debt repayment plan.

The Government would also like to seek views on how a breathing space scheme could interact with the repayment of ‘priority debts’. These are the debts that have the most serious consequences – such as court or bailiff action, disconnection, or eviction – if they are not repaid, and are prioritised by debt advisers when advising clients on their debts.

The Economic Secretary to the Treasury, Stephen Barclay MP, said:

“For many people in the UK problem debt seems impossible to escape. Its effects can be far-reaching, impacting all aspects of a person’s life and leaving them feeling helpless. That is why we are working to give people who are overwhelmed by debt more time to seek advice, find a workable solution, and help get their lives back on track.”

While it is not clear at this stage whether such proposals would affect landlords’ possession cases, especially those due to rent arrears, the NLA will be submitting its response in due course.

Landlords also have bills to pay, so the NLA will seek to ensure that the Government fully takes into account the consequences of this policy and that landlords’ businesses are not jeopardised by being made to wait even longer to pursue debts rightly owed for the provision of housing.

You can read the Call for Evidence here, with responses welcome until 16th January 2018.

For more information, visit

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