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The Breathing Space

Women looking into a piggy bank




How much is the increasing cost of living impacting on you?  With utility, fuel and general household shopping costs increasing, the monthly domestic budget is being challenged, with more people exposed to financial risk.


Prior to the pandemic, the choices for individuals suffering debt problems were primarily, individual voluntary arrangements (“IVA”), bankruptcy, debt management plans or debt relief orders.  While that appeared to provide a degree of choice, issues surrounding the likes of debt versus assets could often restrict choice.  The common features, though, were often creditor pressure (with the associated demands) and stress imposed on the debtor.


In May 2021 the Government launched the Debt Respite Scheme or, as it is more commonly known as, the Breathing Space.  The Breathing Space scheme is designed to provide just that, some time away from creditor pressures while a debtor tries to reach a solution for resolving their situation.  In addition, specific procedures were set up for those who have medical evidence to confirm they are receiving mental health crisis treatment.


A Breathing Space order provides a debtor with 60 days of protection while mental health applications provide for protection over the duration of the crisis treatment plus a further 30 days.  Government statistics suggest a debtor who is subject to a Breathing Space order has over 3 times more chance of entering into a debt solution than had they not been afforded the time to sort out their affairs and by April 2022 some 58,000 applications had been registered.  This included over 900 applications where the debtor was receiving mental health crisis treatment.


These applications are made on a debtor’s behalf by the likes of the Citizens Advice Bureau, Council monetary advice centres or Step Change.  However, if the debt solution is to consider entering into an IVA then you will require an insolvency practitioner.


To supplement the Breathing Space legislation, consultation is currently ongoing for the introduction of the Statutory Debt Repayment Plan (“SDRP”).  Unlike a debt management plan, this will be a regulated and structured scheme that provides up to ten years for a debtor to repay their debt.  Unlike some commentary and social media adverts we have seen, the Government are NOT promoting any scheme that sees 85% of your debt written off.  The SDRP is designed for repaying the entire unsecured debt (e.g loans, credit cards etc) so should not be entered into lightly.


At PBC we take the view the proposed SDRP provides a solution for people who fall between the current formal options available.  It may also assist those where an IVA is more appropriate but creditors’ general lack of understanding (of insolvency) or a simple reluctance to support an alternative to bankruptcy, invariably forces a debtor into bankruptcy, which as is proved in the majority of cases, the “Poor” alternative.


If you require any advice or assistance on mediation or any other insolvency-related issue, then please contact PBC Business Recovery & Insolvency to discuss and advise on your situation on 01604 212150 or email to  Alternatively, visit for further information.