Mental Health Breathing Space & Mental Health Crisis Breathing Space Moratoriums

The new regulation came into force on 4 May 2021 and places a strong emphasis on allowing individuals who meet the relevant eligibility criteria to apply for either a Breathing Space Moratorium or a Mental Health Crisis Moratorium.

In either case, the effect of the moratorium is to restrict the enforcement action by creditors and to freeze interest, fees and charges on debts.

What this means

When an individual applies, via a debt advice provider, for either a Breathing Space Moratorium or a Mental Health Crisis Moratorium, it allows an individual with a debt problem the opportunity to seek professional debt advice and formulate a long-term solution to their financial difficulties, as enforcement action is restricted.

Duration of a Breathing Space Moratorium and the Mental Health Crisis Breathing Space Moratorium

The duration of a Breathing Space Moratorium starts on the day after an entry is made on the register and continues for a period of 60 days beginning on the day on which it starts. Once the 60-day period is over, individuals cannot apply for another Breathing Space Moratorium within a 12-month period.

A Mental Health Crisis Moratorium has no set time limit and lasts as long as an individual’s specialist mental health treatment continues, plus 30 days. A Mental Health Crisis Moratorium can only be obtained if an approved Mental Health professional certifies that the individual is receiving mental health crisis treatment.

Early Termination: Mental Health Crisis Breathing Space Moratorium

A Mental Health Crisis Moratorium can end earlier in some circumstances due to the following reasons:

• The debt advice provider carries out a review as a result of a creditor request and concludes that the moratorium either unfairly prejudices the interest of the creditor, or there has been some material irregularity in relation to the matters set out in The Regulations.
• The court concludes on an application by a creditor that the moratorium either unfairly prejudices the interests of the creditor, or there has been some material irregularity in relation to the matters set out in the Regulations.
• Following the debt advice provider’s midway review, the debt advice provider considers that the debtor has failed to comply with any of their obligations under the Regulations, a debt solution has been put in place in respect of all of the moratorium debts, or the debt advice provider is unable to consult the debtor, including for reasons of the unavailability of the debtor.
• If the debtor dies, the moratorium will end on the day after the death. This also applies to the Mental Health Breathing Space Moratorium.

Eligibility Criteria For A Breathing Space Moratorium:

• An individual with a problem debt can only seek protection of a moratorium if they satisfy the following criteria:
• They are an individual
• They owe a qualifying debt to a creditor
• They are domiciled or ordinarily resident in England or Wales
• They are not subject to an individual voluntary arrangement, an interim order or a debt relief order
• They are not undischarged bankrupt
• They must not be subject to any current Breathing Space moratorium. Where they have previously been subject to a Breathing Space moratorium, a period of no less than 12 months must have elapsed since the date on which that moratorium ended
• They are not subject to a Mental Health Crisis Moratorium

Eligibility Criteria For A Mental Health Crisis Breathing Space Moratorium:

An individual who;

• In England and Wales, those receiving mental health crisis treatment
• Has been detained in hospital for assessment or treatment (under the Mental Health Act 1983)
• Has been removed to a place of safety by the police.
• Is receiving any other crisis, emergency, acute care, hospital treatment, or is in the community from a specialist mental health service in relation to a mental disorder of a serious nature.

How we can help

Need advice on a Breathing‑Space Moratorium or Mental Health Crisis Breathing‑Space Moratorium?

If you’re dealing with a debtor who is in a Moratorium and needs advice, speak to one of our experienced solicitors today. Our Dispute Resolution team has extensive experience in assisting with the points raised in this article. If you have any questions, please get in touch with Abbie Clapham, use our online enquiry form, call 0330 404 0738 or visit your nearest Ashtons Legal office.

We’re here to help you take control and move forward.