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Treasury announces ‘Breathing Space’ for problem debts

HM Treasury has announced a new scheme to support those in problem debt, including those with mental health issues. The new scheme will introduce a new 60 day ‘Breathing Space period’ during which interest payments will be frozen, and enforcement action by creditors will be suspended, provided the individuals use the time to speak to professional debt advisers about how they can solve their debt issues.

Individuals suffering with mental health issues and receiving NHS treatment for it will have protections throughout their treatment. Additionally, they will not be subject to the requirement to seek advice during the 60 day period. HM Treasury will also introduce a ‘Statutory Debt Repayment Plan’ to assist with repayment over a manageable period. The scheme will cover a range of debts including arrears to central and local government.

Proposals will be put to Parliament by the end of the year, and the Government aim to implement the scheme by 2021.

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Alex Louch