Following the government’s 2017 manifesto commitment to implement a Breathing Space and a Statutory Debt Repayment Plan, we have submitted our response to the recent consultation on the policy proposal.
To iron out the details of the scheme, the government’s consultation covered three main areas:
- Eligibility criteria for entering Breathing Space and SDRPs
- Protections of Breathing Space and SDRPs
- Details of how the two policies would be administered, including funding of the scheme.
We believe that clearer and more certain protection for consumers at both the advice stage and beyond will encourage more consumers to seek advice and to do so earlier in the process. Because of this, we very much welcome the proposed changes.
What is Breathing Space?
Breathing Space is the period of time during which an individual in problem debt is provided with respite from creditor action in order to fully engage with advice and seek a sustainable solution.
The new policy will formalise this process and broaden the scope to include creditors who fall outside of Financial Conduct Authority (FCA) regulation and so fall outside the current scheme. This will make Breathing Space much more effective, particularly for people with arrears of priority debts.
A new Statutory Debt Repayment Plan will incorporate many of the features of a DMP but will provide additional protections against enforcement activity and the charging of interest making it a much more attractive alternative.
The consultation closed on Tuesday 29 January. Read PayPlan’s response to the Breathing Space consultation.