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calendar04 February 2019

Author: Claire Wong

Need some room to breathe?

Need some room to breathe?

Imagine you’re drowning in debt. There’s someone hammering on your door, saying you need to pay up. You want to pay back what you owe, but you need help, and you need more time. If only the knocking at the door would stop…

What is Breathing Space?

Breathing Space is a fixed period of time when creditors stop contacting the person who owes them money. It means no visits, no letters, no phonecalls chasing you for your debts. This is to give people in debt a fighting chance to get crucial advice and support. It’s where we can step in to start a client on their journey out of debt.

Why has CAP released a paper on this?

The government has put together its proposals for how to run Breathing Space (and also something they’re calling the ‘statutory debt repayment plan’), and they’ve asked for feedback. It’s great that we get to be part of the discussion on issues like this. We’re committed to being a voice for our clients, and we respond with their needs in mind.

So what does the proposal say and what’s CAP’s view?

Read CAP's paper here



The two big headlines proposed are:

  1. Breathing Space: your creditors leave you alone for 60 days while you get advice on a repayment plan.
  2. A statutory debt repayment plan – anyone repaying their debts through this scheme would be safe from creditors taking action against them.


Here are some key things we’ve said in response:

  • On the whole, we support Breathing Space. It gives people a chance to call us and start their journey out of debt, and we’re always keen for that to happen.
  • However, we believe it’s important that all creditors take a step back during this time (no more relentless phone calls, frightening letters, or visits from enforcement agents). Otherwise there’s a risk it becomes too stressful and difficult to engage with a debt repayment plan.
  • For example, the proposal excludes fraudulent debts & court fines the same way they wouldn’t be covered if you were going through insolvency, but we’re arguing this doesn’t need to be the case because Breathing Space is very different to insolvency!
  • We’re against the idea of a public register of everyone on Breathing Space. The thought of being on a register could really put people off asking for the help they need.
  • We’d like to see interest and charges paused for anyone on this scheme, but only if this won’t affect their credit file by showing up as a default.
  • While we understand a statutory debt repayment plan will appear on a debtor’s credit file, we believe that as soon as the plan is completed and the debts gone, they should have a clean slate. We believe in giving people a fresh start!
  • We like giving people the option of payment breaks, so that if life suddenly changes (maybe you’re in hospital or lose your job) you can have a break from making repayments.
  • Last of all, we know that life can be busy and complicated when you’re in debt. Sometimes it’s hard to keep track of everything you owe, so we’d like there to be a way to add debts to the repayment plan after it’s started, in case something has been missed.

That’s great, but will CAP’s voice be heard?

The good news is that the government is listening to us! Our recommendations have already led to some changes. We asked for a safeguard so people wouldn’t be forced into having a Pre-Payment Meter fitted, and it happened. Then we asked for the option not to include rent arrears in the repayment plan to protect people worried about eviction. You guessed it, they said yes to that too!


This year (2019) we should see Breathing Space become a reality and the government is set to announce next steps for the statutory debt plan soon.


Want to know more?

Read the full report here

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