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The Debt Respite Scheme was signed into law on 17th November 2020, to help those in debt by giving them “Breathing Space”. 
No-one intentionally gets into debt and during the COVID-19 pandemic, households and individuals have struggled even more to get out of debt. 
280 people a day were declared insolvent or bankrupt in England or Wales in August to October 2020. This was equivalent to one person every 5 minutes and 8 seconds. 
Unfortunately getting into debt can turn into a downward spiral, compounding the issues and adding additional distress. 
The Debt Respite Scheme which comes into effect on 4th May 2021, is also referred to as Breathing Space Moratorium and Mental Health Crisis Moratorium. It can give those in debt a breathing space to obtain debt support to help get out of problem debt. 

Breathing Space Moratorium 

The scheme has been set up to try and help those in problem debt obtain support with professional debt advisers. By engaging with a professional debt advisor, they can register a referral for the Debt Respite Scheme. If the problem debt is eligible, this will give the debtor a 60-day breathing space moratorium period where interest, fees and charges are frozen and enforcement action is paused for the period. 
Although not all debt is included within scheme, such as secured debt, although secured debt arrears will be covered. 
There is no limit to how many times debtors can apply for the scheme although you cannot apply more than once in a twelve-month period. 

Mental Health Crisis Moratorium 

The most vulnerable debtors that are receiving mental health crisis care and can provide evidence of such care are able to apply for the Mental Health Crisis Moratorium. This differs to the Breathing Space Moratorium in such as, there is not the limit of a 60 day breathing space, the moratorium will last for as long as the debtor is receiving mental health crisis care and for a period of 30 days after the end of the treatment. 
We recommend using a free debt advice charity to support you with managing your debt and have a list of local and national organisations that can support you on our website. 
Debt advice organisations cannot charge you for a referral. 
Tagged as: Debt Advice
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