Dealing with debt can be exhausting and with the threat of legal action constantly hanging over your head, it can take its toll on your physical and mental health. But you may be able to get a much-needed break from your debts without the added pressure of being contacted or harassed by your creditors.
Breathing Space (Scotland) is the name given to a period of temporary debt relief within which creditors can’t take any action against you to get you to repay what you owe. The scheme is designed to give you some extra time to assess your finances and consider all available options for getting out of debt.
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What is Breathing Space (Scotland)?
Breathing Space (Scotland) – officially known as Statutory Moratorium – is a way of temporarily pausing all contact from your creditors for a fixed period to give you time to review your financial situation and decide how you’re going to tackle your debts.
During this time, your creditors won’t be able to contact you or take legal action against you to force you to repay what you owe, but interest and charges can still be added to your debts. This means that, while you’ll be protected from your creditors, your total debt level can still increase.
Furthermore, you can only apply for a temporary payment break once during any 12-month period. So if you’ve already made an application within the last year, you won’t be able to apply. Because of this, it should only ever be used in an emergency or at an early stage while you decide how you’re going to deal with your debts.
Breathing Space is also the name of a free, confidential phone-based service designed to help anyone in Scotland over the age of 16 who may be feeling stressed, isolated, or overwhelmed. The service provides a safe and supportive space by listening and offering advice to those who are feeling low and don’t know where to turn for help.
When you phone Breathing Space or use their webchat service, your query will be answered by one of their specialist advisors who come from a range of mental health, counselling, and social work backgrounds and are trained to deal with a variety of problems, from depression to loneliness.
How does Breathing Space work?
Breathing Space aims to provide temporary relief to individuals who may be experiencing low mood, depression, or anxiety due to unaffordable debt. Typically, this time is used to consider the whole spectrum of debt solutions available, whether that means entering into a formal debt solution like the Debt Arrangement Scheme (DAS) or filing for bankruptcy.
Once your application has been approved, your creditor will be informed and instructed not to make demands for payment or serve court orders for six months (previously six weeks). This can give you time to assess your debts and decide how you’re going to repay what you owe.
During these six months, your details will be visible on the Register of Insolvencies, which is a public register containing details of all individuals and companies that are bankrupt, in a formal debt solution, or in an active moratorium period in Scotland.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
Am I eligible for Breathing Space?
Generally, you should be able to apply for Breathing Space if you:
- Are a resident of Scotland
- Require short-term relief from your creditors
- Haven’t made an application in the last 12 months
- Are considering a formal debt solution such as a Protected Trust Deed or DAS
How do I apply for Breathing Space?
The quickest way to apply for Breathing Space is to submit an application form through the Accountant in Bankruptcy (AiB) homepage.
Alternatively, you can email a completed application form to [email protected] or post it to:
Moratorium Application
IRT
Accountant in Bankruptcy
1 Pennyburn Road
KILWINNING
KA13 6SA
Conclusion
Breathing Space (Scotland) can alleviate the pressure of being in debt by stopping your creditors from contacting you or pursuing you for money owed for up to six months.
This time can be used to consider your options for dealing with unaffordable debt and help you decide whether to enter into a formal debt solution like the DAS or file for bankruptcy.
If your financial situation has made it difficult to cope with everyday life, don’t hesitate to reach out for help. Whether you’re already in arrears or are just worried about making ends meet, experienced advisors can offer tailored advice to help you deal with your money worries.
