Breathing Space Regulations

On 4th May 2021 new Breathing Space Regulations came into force to assist individuals and sole traders with problem debt.

The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 more commonly known as the Breathing Space Regulations will impact on the your debt collection process if individuals or sole traders in England and Wales owe you money.

In short, an individual or sole trader (that is not VAT registered) can ask a debt adviser to activate a Breathing Space period if they are struggling with debt. This means that creditors will be prevented from any debt collection activity for at least 60 days.

Detailed below are some frequently asked questions helping creditors to deal with the Breathing Space Regulations.

Summary

These new Breathing Space Regulations may seem a blow to creditors who have already suffered delays with their debt collection process against individuals and sole traders through the introduction of the Pre-Action Protocol introduced in 2017.

Although a further potential delay of 60 days is unhelpful to creditors, it is hoped that the new Regulations will encourage debtor engagement via an approved Debt Advisor. This should hopefully result in regular payments being made to creditors rather than debtors simply burying their head in the sand which is a positive.

There is a lot of information to take in, therefore we would recommend downloading our simple flow chart guide for creditors below.

Breathing Space Flow Chart

Download our free Breathing Space Regulations Flow Chart Guidance for Creditors.

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See how Breathing Space may impact your debt collection process.