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BRI Business Recovery and Insolvency

We are an independent company of insolvency practitioners committed to finding the right solutions for businesses and individuals in financial difficulty

Formal breathing space to be given to struggling debtors

Formal breathing space to be given to struggling debtors

19 June 2019:  The Government has announced proposals to help those struggling with serious debt by providing a new two-month “breathing space”, during which they cannot be pursued by debt collectors and bailiffs.  Those eligible will also see interest, fees and charges frozen.  All contact with a debtor relating to repayment demands would be prevented and a creditor would not be allowed to apply to the court to enforce a judgment or order.  The Government has said that the protection would apply to as many of an individual’s personal debts as possible and the Treasury confirmed a broad range of debts would be covered including council tax, personal tax and benefits overpayments.

The idea of the scheme is to take the immediate pressure off a debtor to allow them time to engage with a professional debt adviser and find a long term solution to their problems.  The proposals include a new statutory debt repayment plan, which can adjust as a debtor’s circumstances change, and it will be interesting to see what form this will take and how it will differ from the current options already available to a debtor, such as bankruptcy and an individual voluntary arrangement.  Record numbers of people have been seeking help according to the debt charity StepChange, who revealed in April that it was contacted by 657,000 people in 2018, a 6% increase from 2017.

If you are struggling with debt, our advice is to seek help from a regulated professional.  The BRI management team are always happy to speak to you on a confidential and no obligation basis so please do get in touch if required.