The Government are delivering on the commitment to introduce a new ‘Breathing Space’ for people struggling with problem debt, giving them the time and support they need to get their finances under control and get away from the stress debt can cause.
In 2021 new rules will apply to people struggling with debt as the Government strive to tackle the stress serious debt can cause. These rules will bring a 60 day ‘breathing space’ period, further protecting those with problem debt by freezing interest payments and halting enforcement action from creditors.
The scheme outlines the necessity for companies to do credit checks to avoid these types of situations and prevent people from getting into serious debt.
Moreover, the scheme also provides these people the opportunity to engage with professional debt advisers so that they can find a long-term solution to their debts and get back on track with payments.
However, the Government see that mental health issues are linked to problem debt so those receiving treatment for mental health crisis will not be required to seek debt advice during this period. This scheme can be vital for the wellbeing of those suffering with mental health issues.
Problem debt can have a drastic impact on people’s lives as it places a burden upon them, whereas with this reform they will have the knowledge and security in knowing they will be given the time and protections they need to resolve financial difficulties.