New Government Breathing Space   

2nd February 2021

The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (SI 2020/ 1311) will come into force on 4th May 2021.

The legislation provides some additional protection for certain categories of debtors, in particular people struggling with debt whilst experiencing mental health issues.  The aim of the legislation is to provide additional support to allow those individuals some time so that they can get financially back on track.  This includes:

  • A 60-day moratorium period during which eligible individuals can have their interest fees and bank charges put on hold, and during which no enforcement action can be taken against them to recover the sums due.  This is known as the ‘breathing space.’
  • Individuals receiving support for mental health issues will be protected throughout their period of treatment.
  • Further support will be made available from the UK Insolvency Service.


This protection does not apply to all types of debt or all types of debtor.  There are various types of debt excluded from the protection, including fines imposed by a court, debts incurred by fraudulent activity by the debtor, any obligation arising under a Court Order made in family proceedings, and liability to pay damages for negligence, nuisance or breach of statutory duty.

Business debts and secured debts are also not covered. The legislation really only covers any sums due from an individual under a court judgment or warrant of possession, a controlled goods agreement, or any payment due to be made to the Crown.

What does this mean for Creditors?

Creditors will need to be aware of when and how these protections apply, so as to avoid taking enforcement action at the wrong time which could give rise to wasted costs.

However, a creditor can challenge the protections afforded by the legislation, and a Court has a certain level of discretion to set the moratorium aside if it feels it is appropriate to do so.

Here to help

 If you have any questions concerning your company, or if this article has raised concerns for you, our hugely experienced Dispute Resolution team at Ansons are here to help.

Please get in touch with Adam Pike, Associate Director, by email at or call  01543 431197.

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