What is the Debt Respite Scheme?
The Debt Respite Scheme (Breathing Space) is a free scheme which provides debtors with temporary legal protection from their creditors.
There are two different different types of Breathing Space under the Debt Respite Scheme: Standard Breathing Space and Mental Health Crisis Breathing Space.
Standard Breathing Space is available to anyone with ‘problem debt’, whereas Mental Health Crisis Breathing Space is only available to someone who is receiving mental health crisis treatment.
Tenants have to formally apply to the scheme, which is administered by the Insolvency Service, and landlords will receive formal notification if their tenant has qualified for the scheme.
Why has the Debt Respite Scheme been introduced?
The aim of the scheme is to give people who are experiencing rent arrears or other debt related issues a period to help them recover from their debt problems, without pressure. In this time, they can focus on gaining debt advice and setting up a solution to manage their debt.
When does the Debt Respite Scheme come into force?
The Debt Respite Scheme launched on 4th May 2021.
How long is the Breathing Space period?
The period of Breathing Space differs between the respective types, see the period for each below:
- For Standard Breathing Space, the time period is 60 days.
- For Mental Health Crisis Breathing Space, the time period is not set in stone. It lasts as long as the person’s mental health crisis treatment. This will be monitored and reasonable and at the discretion of the health professionals.
What does the Debt Respite Scheme protect the tenant from?
Standard Breathing Space stops landlords taking enforcement action, prevents the creditor (i.e. the landlord) from getting in contact with the tenant and freezes most debt charges; for the entire period of 60 days.
Mental Health Breathing Space holds many of the same protections as Standard Breathing Space, as well as some stronger protections. For further insight to the protections of Mental Health Breathing Space, please refer to the Gov UK website here.
Is my tenant eligible for Breathing Space?
Does my tenant qualify for Standard Breathing Space?
To qualify for Standard Breathing Space, a tenant must:
- Be an individual
- Owe a qualifying debt to a creditor
- Live in England or Wales
- Not have had a Breathing Space within the last 12 months at the time of applying
Is my tenant eligible for Mental Health Crisis Breathing Space?
To be eligible for Mental Health Crisis Breathing space, the criteria is the same as Standard Breathing Space; with the extra condition that the individual must also be receiving Mental Health Crisis treatment at the time of applying.
A debtor who has had a Standard or Mental Health Crisis Breathing Space period in the last 12 months may still qualify for a Mental Health Crisis Breathing Space.
What is a qualifying debt?
Most debts are categorised as ‘qualifying debts’, for a full list pleaser visit the Gov UK website here.
Qualifying debts are not exclusive to debts incurred after the introduction of Breathing Space Legislation on 4th May, therefore they can include debts held by the debtor prior to the implementation of this new legislation.
What does the Debt Respite Scheme mean for landlords?
What if my tenant takes a Standard Breathing Space period?
For landlords, if your tenant enters the Debt Respite Scheme and takes a Standard Breathing Space period, there are certain things you can and can’t do. As mentioned earlier, there is to be no contact with your tenant.
Can landlords take enforcement action during the Breathing Space period?
In addition, you cannot issue a Section 8 on ground 8,10 or 11 for rent arrears during the period; but a Section 8 can be issued for other reasons. A Section 21 notice can still be issued. Please get in contact with our Team here to find out more about Section 8 and 21 notices during Breathing Space periods.
What if an existing rent arrears eviction Notice is due to expire during the Breathing Space period?
If a S8 rent arrears eviction Notice is due to expire during the Breathing Space period, the Notice can be extended by an additional eight weeks in which to bring a Court possession claim.
Does my tenant have to pay rent during the Breathing Space period?
Yes, debtors are still legally required to pay their debts; and should continue to pay any debts they owe you. If they do not pay rent during this period they will continue to accrue as arrears.
When can landlords proceed with possession orders?
After the Breathing Space period, landlords can commence eviction proceedings against their tenants, especially if there are substantial rent arrears (equal to or more than 6 full months of arrears).
A specialist Landlord & Tenant Lawyer's view
Will Bartley, Landlord & Tenant Lawyer, says: "It is no surprise to see legislation of this sort implemented, especially after the difficult and stressful period that tenants, some of whom will have lost their jobs during the Pandemic, have experienced over the past year.
It is the hope of Government that by introducing this scheme it will allow tenants to take the suitable steps and advice needed to rectify their debt situation and hopefully avoid such issues in the future.
This will however be of little comfort to landlords, many of whom already have tenants in significant arrears, and the prospect of further eviction delays will not be welcome. However they will be pleased that other S8 grounds or a S21 Notice can still be relied upon during the Breathing Space period."
Property & Landlord Solicitors
For further advice on Breathing Space, enforcement action or anything else Landlord & Tenant related; please get in touch with our Property Litigation Department.
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