Breathing space scheme

Government launches Breathing Space scheme for indebted individuals

Authored by Kelly Burton

Kelly Burton

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Approximate read time: 3 minutes

The government has launched the Breathing Space scheme (Debt Respite Scheme) to help individuals struggling with debt, allowing them time to seek out professional help for repayment or recovery. The Treasury estimates 700,000 people could benefit from the scheme.

What is the Breathing Space scheme?

The new Breathing Space scheme is intended to help indebted individuals by giving them more room to pursue debt recovery and repayment options without worrying about creditors coming after them. Those who apply for the scheme are designated a 60-day break from creditor pressure, including reminders and enforcement action. Interest on the debts is frozen for the duration, as well as penalty charges.

Additionally, those undergoing mental health crisis treatment can partake in a separate scheme lasting the same length with an additional 30 days.

Economic Secretary to the Treasury, John Glen, believes the new scheme will help tackle problem debt and allow people to get their finances back on track:

“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.”

The Breathing Space scheme cannot be applied for directly, and those wishing to apply should speak to a debt advisor or debt charities. Local councils may also allow people to apply.

Can the Breathing Space scheme relieve debts?

Although the Breathing Space scheme grants those in debt a break from creditor pressure, the scheme isn’t a debt relief method. Indebted individuals still need to look for either a formal or informal process to repay their debts before the scheme ends.

An individual can only utilise the Breathing Space scheme once in 12 months, and mortgage, rent, utility bills and taxes still need paying for the duration.

How we can help with your debt

Once an individual is accepted for the Breathing Space Scheme, they should seek out the debt relief option best suited for their circumstances.

Formal repayment plans

An Individual Voluntary Arrangement (IVA) is a formal repayment arrangement for sole traders and individuals struggling with debt. The arrangement takes all unsecured debts and consolidates them into a single monthly repayment tailored to what’s affordable. The arrangement usually lasts five years, and once concluded, all the remaining unpaid debt is written off.

More on Individual Voluntary Arrangements


There may be circumstances in which repaying the debt won’t be suitable. In that case, insolvent individuals can apply to go bankrupt. A creditor can make an individual bankrupt if they owe them more than £5,000, and the insolvent individual can apply to make themselves bankrupt for £680. The process lasts for a year and creditor pressure is frozen for the duration, although it will have a negative impact on the individual’s credit rating.

More on bankruptcy


The government’s recently launched Breathing Space scheme (Debt Respite Scheme) aims to help indebted people by giving them a 60-day break from creditor pressure and a freeze on accruing interest. Those receiving mental health treatment can apply for a separate scheme and receive an extra 30 days on top of those 60. This extra breathing space is designed to allow people time to seek out an arrangement to clear or repay their debts. It is not a replacement for those schemes and can only be used once in 12 months.

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