New Laws to Give Debtors ‘Breathing Space’ from Creditors

June 19, 2019

New laws will soon see people with problem debts given the opportunity to resolve them without having to deal with pressures from creditors.

Legislation granting debtors ‘breathing space’ from their creditors has been unveiled by the government and is scheduled to come into effect from 2021.

The plans will see individual debtors given 60 days in which to seek out help from debt advisors with a view to establishing a long-term strategy about becoming debt free.

In return for taking that action and reaching out for third party support, debtors will be legally granted protections from enforcement actions from creditors and they won’t be charged any extra interest on their debts for that period of nearly two months.


Expectations are that the new laws will help a great many people across the UK to take charge of their finances and start turning around their problem debt situations.

People with mental health problems, who are disproportionally likely to be dealing with serious debts, will be given further legal protections.

Anyone with mental health issues will be protected from their debtors while they get treatment from the NHS and they won’t be obliged to immediately seek out support from debt advisors.

“People looking for a sustainable way to repay their debts have traditionally had little protection, leaving them vulnerable to inconsistent approaches by different creditors that can harm their chances of recovery – something as a debt charity we’ve long felt needed reform,” explained Phil Andrew, chief executive of the debt help charity StepChange.

“Breathing Space and statutory debt repayment plans will fundamentally improve how people seeking to repay debt are treated, putting them in a far less precarious position,” he added.

“This scheme could genuinely save lives,” said Helen Undy, chief executive of the Money and Mental Health Policy Institute.

“Everyone experiencing a mental health crisis should have the opportunity to recover free from escalating debt fees, charges and the threat of bailiffs arriving at their door.

“We are delighted that the government acted on our call to protect people from being hassled about debts while they’re receiving crisis care, and we look forward to working with ministers to put these plans in place over the coming year.”

Paul Barber

Head Adviser at our Manchester Office

Tel: 0800 001 4247

Related News