Government considers six-week ‘breathing space’ for those in serious debt

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People with problem debt could be exempted from further interest, charges and enforcement action for six weeks to give them chance to seek debt advice, the government has confirmed.


Currently, agreements to freeze interest and charges and to suspend debt recovery and enforcement action are made voluntarily between creditors and debtors.

Earlier this year, the government made a manifesto commitment to introduce a ‘breathing space’ scheme to provide those with serious problem debts with legal protection from further interest, charges and enforcement action for up to six weeks to obtain debt advice, followed by, where appropriate, a statutory debt repayment plan. Following the general election, the government confirmed that it would introduce a six-week breathing space scheme.


The Treasury has launched a consultation until January to gain insight from creditors and the debt advice sector about how best to design, implement, administer and monitor such a scheme.

In particular, the government is seeking views on the following key issues:

  • Should the scheme apply to Wales and Northern Ireland as well as to England? (Scotland already has a similar scheme in place)
  • How should ‘serious problem debt’ be defined?
  • When should the scheme be triggered?
  • Should all debts be eligible and should debts owed by the self-employed and microbusinesses be included?
  • What safeguards are needed to prevent the scheme from being abused?
  • How might statutory debt repayment plans work as a debt solution?

The consultation can be accessed via this link -


Many lenders already offer breathing space as a matter of good practice but the proposed statutory scheme will understandably be of concern to lenders worried about the length of time it might take to recoup outstanding debts in future.

For more information

If you have any outstanding overdue commercial accounts where previous efforts to collect have failed, please get in touch to discuss how Geldards’ Debt Recovery Team can help to develop a bespoke solution which will encourage the best possible outcome. A Letter Before Action is charged at just £5 plus VAT. Reduced commission rates can be considered for a selection of new cases to allow you to see how well we can work for your business.


Content Contacts


Christine Sharpe


Head of Debt Recovery, Cardiff

+44 (0)29 2038 6541