The purpose of the Scheme is to provide a temporary period of respite from the action of a creditor (e.g. a landlord or letting agent) to help people in problem debt (e.g. a tenant) consider their options and engage with professional debt advice.
A Breathing Space is not a payment holiday and rent is considered an ‘ongoing liability’. There is also an alternative way into the scheme for people receiving mental health crisis treatment. A mental health crisis moratorium has some stronger protections and lasts as long as a person’s mental health crisis treatment, plus 30 days. A Breathing Space can only be started by a debt advice provider who is authorised by the Financial Conduct Authority (FCA) to offer debt counselling.
Once a Breathing Space has started, no enforcement action can take place against the debtor or anyone who is jointly liable with them for a Breathing Space debt. This includes serving a notice to take possession of a property let to the debtor on the grounds of rent arrears due up to the start of the Breathing Space, or take possession of a property let to the debtor having served such a notice prior to the start of the Breathing Space.
Creditors identified by the debt adviser will receive a notification when someone enters a moratorium. Once notified about a Breathing Space the creditor must stop the debtor from having to pay certain interest, fees, penalties, or charges for that debt during the Breathing Space, stop any enforcement or recovery action to recover that debt and not contact the debtor to request repayment of that debt.