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The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 comes into force 4th May
Coming in on the 4th of May is a new scheme that provides a temporary period of relief from creditors for individuals in England and Wales to help those with problem debt. It will apply to most debts accrued before or after 4 May, including rent arrears.
When creditors, such as landlords are notified about a moratorium debt, they must pause enforcement action and freeze charges, fees and certain interest for the duration of the moratorium.
Please note that if the tenant has successfully applied for a Breathing Space and has included rent arrears in their application, then the landlord will be notified by the Insolvency Service. In these limited circumstances it means:
- You must put on hold any action you are taking in relation to the rent arrears (including court action) for as long as the Breathing Space lasts
- A Section 8 notice cannot be issued for rent arrears (grounds 8,10 & 11) but can on any other available grounds
Any Section 8 notices issued and served on a tenant from 4 May 2021 must now include details of the Breathing Space scheme - please note that the Bank Holiday weekend may mean that notices sent out in the last two days may not be deemed served until Tuesday, making them invalid without the new information. In this case, notices should be re-served as soon as the new form Section 8 notice is available. We will update members about any changes to notices as soon as they are published.
The Insolvency Service will notify creditors when a debt has entered a moratorium. Creditors will need to prepare to receive notifications from the Insolvency Service and process them in order to implement the protections.
Agents and landlords can contact breathingspace@insolvency.gov.
