A standard breathing space is available to any individual with problem debt and gives them legal protections from creditor action for up to 60 days.
“The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts” says the government guidance.
Individuals can access this standard breathing space - which the government states “is not a payment holiday” - only through an approved debt adviser registered with the Financial Conduct Authority, or via a local authority if it is approved to offer this kind of advice to its residents.
An individual who applies for such a ‘space’ can get no more than one a year.
A mental health crisis breathing space is only available to a client who is receiving recognised mental health crisis treatment.
If an approved mental health professional certifies a client is in mental health crisis treatment, the client or someone else might ask for a mental health crisis breathing space on the client's behalf.
The mental health crisis breathing space has some stronger protections than the standard breathing space. It lasts as long as the client's mental health crisis treatment, plus 30 additional days thereafter, no matter how long the crisis treatment lasts.
If you’re a creditor - that is, a landlord with arrears owed - and if you’re told that a debt owed to you is in a breathing space, you must stop all action related to that debt and apply the protections.
These protections must stay in place until the breathing space ends.
In addition, if you receive a notification of a breathing space debt that you have sold to another creditor - so for example, you may have sold your buy to let property to another investor or owner occupier - you must tell that creditor the breathing space has started and give their contact details to the debt adviser.
“If you do not do this as soon as possible, you’re liable for any losses the debtor or the assigned creditor have as a result” says the government advice.
There are lengthy guidelines recently put up on the government website, and you can see them here.
The National Residential Landlords Association has analysed the guidelines and says that for most landlords, the impact of the new laws will of course occur where a tenant is in arrears.
“In these cases they cannot serve a Section 8 notice, apply for a warrant or money judgement or receive a possession order during the breathing space. They should also not contact the tenant to request payment of the debt during this time” says the NRLA.
And it warns: “It is worth noting that secured debts aren't covered by breathing space rules, so your mortgage lender would still expect to receive mortgage payments during the period your tenant was in their tenant is in a breathing space. However it is likely you would be able to come to an arrangement should you explain the situation.”
The association adds: "You may continue to contact your tenant about anything not related to the debt. For example, arranging repairs or inspections for electrical or gas safety checks. In addition to this, if the tenant has asked to talk to you about a debt solution or debt then you can answer these enquiries.”
However, the onus is on the landlord to resist making contact or instigating actions to chase the arrears or begin an evictions process.
You can see the NRLA’s guidance on the new law here.
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