The Ins and Outs of Breathing Space
What is ‘Breathing Space’?
Breathing Space is the informal name for the Debt Respite Scheme, which was introduced by the government in England and Wales during the pandemic when many people found themselves suddenly in tough financial situations and unable to keep up with rent, mortgage payments or bills.
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The scheme gives people a minimum 60-day period of legal protection, or ‘breathing space’, in which creditors can’t collect on existing debts and landlords are not allowed to serve certain kinds of notices of evictions, offering people an all-important window of time in which to receive help in managing their debt problems.
During this time, interest or charges on debts are also frozen and the scheme provides legal advice from qualified debt advisers.
With the current cost-of-living crisis set to continue indefinitely, and energy bills due to rise in the near future, Breathing Space is still an important safety net for residents of England and Wales as we emerge from the pandemic.
Who can apply for Breathing Space?
There are two types of applications – one for people who find themselves in debt that they are unable to pay, and another specifically for people who are suffering a mental health crisis and need a period of respite from their debts whilst they receive help.
In the second case, applicants must be receiving mental health crisis treatment and an Approved Mental Health Practitioner – such as your mental health nurse or psychologist – will need to confirm this in order for you to qualify for the scheme.
Your mental health practitioner is able to take the lead on your Breathing Space application, so you don’t have to worry about filling in lots of forms yourself.
Mental health crises are often linked to debt problems, either because the stress of being in debt causes poor mental health, or because mental health problems can make staying in work difficult.
The link between mental health difficulties and debt is widely acknowledged – a quote from a study by the Royal College of Psychiatrists on The Mental Health Foundation’s website, says that ‘half of all adults with a debt problem are also living with mental ill-health’
How can I apply for Breathing Space?
Mental health Breathing Spaces applications can be made via a referral from the applicant’s nurse, social worker, care coordinator, informal carer, or the person in crisis themselves.
Other kinds of applications can be made through a debt advisor and using the company’s website.
Who doesn’t qualify for Breathing Space?
You won’t qualify to receive Breathing Space if you have a current:
What help can Breathing Space provide for tenants experiencing a mental health crisis?
For people who rent their homes and are experiencing a mental health crisis, Breathing Space immediately halts any debt repayments, such as rent arrears you might have accrued, and stops further charges or interest from being added.
Tenants are protected from debt repayments indefinitely for the duration of the crisis and for an additional 30 days after it is over – and no-one can contact or chase you for payments on existing debts during this time.
There are no limits to how many times someone can apply for this scheme, so you can use it as many times as you need.
What support can other tenants in arrears receive?
For all other tenants the protection is in place for a standard 60-days, during which time most debts, such as rent arrears or utility bill re-payments, are frozen.
During this time, you are expected to work with a debt advisor through the scheme, who will help you to come up with a solid plan for how to repay the debts and manage your finances in the future.
As Lorraine Charlton, a debt expert at Citizens Advice says:
Breathing Space isn’t a temporary fix to simply keep your creditors at arm’s length. You’ll need to work with your debt adviser to try and make a plan to deal with your debts.
You can only apply for the standard scheme once in any 12-month period.
A couple of T&Cs to be aware of…
It’s worth noting that for a standard application, during the 60-day respite period you will also still have to pay any bills that you can reasonably afford – such as ongoing housing costs like mortgage repayments and rent, as well as utility bills, amongst others.
You also can’t take out any new loans of more than £500 during that time.
With a standard Breathing Space application, your debt adviser will carry out a mid-point review 30 days into your Breathing Space period. They can cancel the debt respite period if you don’t engage with the process fully, stay in touch with them regularly enough, or provide them with the information that they need.
With a mental health crisis Breathing Space period, you aren’t expected to stay in touch with your debt adviser or do any future financial planning whilst receiving treatment. Instead, a contact from your mental health team will be the point of contact for the company and the debt adviser during this time.
Can you be evicted during a Breathing Space period?
Whichever scheme you qualify for, whilst you are in the grace period that Breathing Space offers, and as long as you are engaging with your debt adviser and keeping up with ongoing payments that you can still afford, you cannot be evicted from your property for having already fallen behind on your rent – for example under a section 8 notice, the notice usually given if you accrue two months or more of rent arrears.
If you own your home, mortgage lenders aren’t allowed to begin legal processes to repossess it during your Breathing Space period. They can still legally send you notices of your debt, but they can’t enforce repossession or eviction.
However, for private renters of shorthold tenancies – either rolling tenancy agreements or fixed term tenancies that include a break-clause in the contract (the type of tenancy most renters have in the private sector) – the news isn’t quite so good, as you can still be evicted under a section 21 notice.
What does it mean for landlords if your tenant receives Breathing Space?
As a landlord of a tenant who is receiving Breathing Space you will be notified through post or email if your tenant has qualified for the scheme and told when their respite period began.
During the 60-day respite period, you cannot contact your tenant about current rent arrears or other debts they might owe to you, only about things like maintenance needs at your property.
If you want more information about how things are going during the respite period, you can contact your tenant’s debt advisor with any questions. There will also be a mid-point review half-way through the 60-day period.
During the Breathing Space period, you can’t proceed with any enforcement action you may have already begun regarding rent that you are owed – such as an eviction notice or bailiffs – and most fees and interest on your tenant’s debt to you will be paused.
Although you can’t seek to reclaim the rent your tenant already owes you during this time, the 60-day Breathing Space period isn’t a rent and bills holiday for them either.
So long as your tenant is financially able, you should still receive rent during the Breathing Space period, and your tenant remains responsible for the utility bills and council tax at your property.
And if any new rent arrears occur after your tenant has applied to the Breathing Space scheme, you are legally within your rights to take action to recover it.
Is there a happy medium that supports both landlords and tenants?
Breathing Space offers a level of protection to tenants who find themselves in rent arrears or owing money for various bills.
But the scheme isn’t a rent holiday, rather a grace period from a tenant’s current debts. So, landlords might not be able to claim rent arrears immediately, but they will still receive rent from their tenant during the Breathing Space period.
And the scheme ultimately aims to help tenants manage their finances and repay their debts to their landlord in the long-run and avoid getting into debt again in the future – which is a win-win situation for everyone!
