On 4th May 2021, a government initiative entitled “Breathing Space” came into effect, the stated aim being to help people who are struggling to deal with personal debt. The goal is to allow a period of 60 days to take advice and buy time without the stress and worry of mounting debt, threatening letters or enforcement action. During this period, individuals will receive professional debt advice to construct a plan to bring finances under control.
Recognizing the link between problem debt and mental health issues, those receiving mental health crisis treatment will receive protection for the full duration of their treatment plus a further 30 days.
Whilst these measures will no doubt be welcomed by those affected by problem debt, a worrying statistic is that around 700,000 people are projected to use the scheme during its first year, yet more evidence (if needed) of the economic stresses people are facing as the pandemic is brought under control and day to day life returns to some sort of “normality”.
The announcement of “Breathing Space” follows on other government moves to ensure debt letters are less threatening, maintaining funding for the Money and Pensions Service in 2021 – 22. In addition, it was announced that the financial thresholds for Debt Relief Orders are also to be raised.
It is anticipated that the necessary legislation will be laid before Parliament at the beginning of June, the effect being that the threshold on the value of assets held by a debtor in increased from £1,000 to £2,000.
The value of a single motor vehicle that can be disregarded is also raised from £1,000 to £2,000.
A debtor will be permitted to have a surplus monthly income of £75 before he needs to make payments to creditors, an increase of £25 per month.
Finally, the limit for the value of debt allowable for a Debt Relief Order will increase from £20,000 to £30,000.
The directors and staff at T H Financial Recovery have years of experience working with both individuals and businesses in financial difficulty and, just as importantly, offer confidential, practical yet sympathetic advice as to the options that may be available.
Recommended strategies may include Business Assessment & Restructuring, New Funding Options, Creditor Negotiation and Time to Pay Arrangements, Company and Individual Voluntary Arrangements (CVAs & IVAs), Administration, Liquidation and Bankruptcy.
Whatever the issues, most people feel much better having talked their problems through. Do not hesitate to give us a call on 01282 332222 or email info@thfr.co.uk to arrange a FREE, no obligation chat to alleviate your stress and receive practical advice.