Policy and Government

Today marks the start of the Government’s Breathing Space scheme (officially the Debt Respite Scheme). A breathing space gives someone in problem debt legal protection from creditor action for up to 60 days while they seek debt advice. CAP will be able to make applications on behalf of clients eligible for the scheme, along with other FCA authorised debt advisors in England and Wales. Read our blog about what it hopes to deliver for people in problem debt. 

The 'Our story' report is about real people's lives: the stories behind the statistics. As we commemorate 25 years of helping people to escape poverty and write new stories for themselves, we also look back on a year where the pandemic intensified the impact of life on a low income. Download the report today.

CAP has responded to a consultation from the Financial Conduct Authority (FCA) asking for comments on new guidance for mortgage firms. From 1 April firms will no longer be expected not to enforce mortgage repossessions. Until now the financial services’ response to coronavirus has been in step with the wider Government measures, and this date will mark a divergence of the two. As such, CAP has recommended that it would be more appropriate to delay the recommencement of repossessions until public health restrictions have been lifted. Payment deferrals will also no longer be available to new applicants with Tailored Support Guidance in place. CAP has provided comments on this new guidance which is a valuable addition to the existing guidance for firms in the Mortgage Conduct of Business (MCOB) rules. Read our full response below. 

The Debt Relief Order (DRO) was created in 2009 to provide an affordable and proportionate debt relief for people on low incomes. The DRO is a really important solution for CAP clients, costing just £90 compared to £680 for bankruptcy, and 36% of clients become debt free through one. The Insolvency Service have proposed some changes to the monetary eligibility criteria so that more people are able to access a DRO. This includes raising the debt limit to £30,000 (from £20,000), the surplus income threshold to £100 per month (from £50 per month) and the asset limit to £2,000 (from £1,000). We have responded to the consultation to welcome these overdue changes to the eligibility criteria, but urge them to go further to make sure those currently without an affordable, accessible and effective route out of debt have one. 

CAP’s debt help service supports people in finding a route forward. Often, this is through an insolvency solution that provides a fresh start for people with insurmountable financial difficulty. However, too many people face roadblocks that make finding a route out of debt impossible. CAP’s latest report, Simplify the solution, examines how the Debt Relief Order (DRO) can be improved to ensure debt relief is effective, accessible and affordable for all. Click here to read Simplify the solution.