GOVERNMENT PROPOSES ‘BREATHING SPACE’ SCHEME FOR DEBT
A new ‘breathing space’ scheme for those in debt has been proposed by the Government. The scheme, which is currently in consultation until January, would give individuals six weeks free from further interest, charges and enforcement action.
Research by the Financial Conduct Authority estimates that one in six people with outstanding debt are suffering from significant financial distress. The Government has reaffirmed their commitment to ensuring that such people have access to the right advice.
A six-week ‘breathing space’ would allow those in serious debt more time to seek professional advice, and where appropriate, find a workable solution. A similar scheme already exists in Scotland, whereby those entering into a repayment plan have a statutory right to have any interests or charges frozen.
Implementing a similar scheme across the rest of the UK may be able to provide additional support and assistance for those in financial difficulties.
During the consultation phase, the Government will seek views on the design and implementation the scheme, and how it could be monitored. This will include: how best to access and activate the scheme, how it would work for both creditors and debtors, and how to best design a statutory debt management plan.
The Government is thus welcoming views from within the debt advice sector, private and public sector creditors, voluntary sector, and members of the wider society/public who wish to contribute. Views can be submitted here.
James McIlveen from MKB Law’s Debt Team comments: “If individuals are experiencing difficulties, the financial institutions will afford additional time to customers; the court system also has pre-action protocols in place to facilitate time for the resolution of matters.
If you require professional debt advice, there are a number of avenues available including: Solicitors, Law centres, CAB, Banks and Insolvency practitioners. Please contact us if you require any further information.”
Published 1 November 2017 Source: https://www.gov.uk/