From, Tuesday 4 May, The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) Regulations 2020 come into force, which provides a temporary period of relief from creditors for individuals in England and Wales to help those with problem debt.
Any person who is in debt can seek to apply for a moratorium (a legally authorized period of delay in the performance of a legal obligation or the payment of a debt ) from an approved debt advice provider.
There are two types of ‘breathing space’ that a tenant may enter into.
1). A standard breathing space that will last for a maximum of 60 days.
2). or, a mental health crisis breathing space which ends 30 days after the tenant’s treatment finishes.
Once a Breathing Space has started, no enforcement action can take place against the debtor or anyone who is jointly liable with them for a Breathing Space debt.
What you need to be aware of:-
Letting agents should be aware of the impact on landlords, especially those seeking possession due to rent arrears.
If a 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:
- Landlords and agents must put on hold any action they 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.
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 email@example.com to discuss their options for receiving and managing notifications.