A new law in Scotland means that some tenants with certified mental illness would have debt recovery action against them paused temporarily.

The Bankruptcy and Diligence (Scotland) Act 2024 allows such a pause. The intention is to create a safety net for individuals in an acute mental health crisis that impairs their ability to manage debts. 

If someone meets the eligibility criteria, focused on the most severe mental health conditions, they could be granted a protected period during which creditors are barred from chasing debts or initiating recovery proceedings.

A statement from Propertymark, the lettings agency trade group, which backs the measure, says: “In practice, this ’breathing space‘ would halt calls, letters, court actions, and enforcement related to the person’s debts. Rent arrears would fall under the moratorium’s umbrella, meaning a landlord could not pursue or enforce unpaid rent during the protected period. Interest and fees on debts would also be paused to prevent the situation from worsening.”

To be entitled for such a pause, debtors must have a certification from a medical or mental health professional. Those already subject to bankruptcy or a debt repayment plan of some kind are excluded to avoid overlap with existing support.

The moratorium lasts as long as the debtor is deemed to be ‘in crisis’ and during the moratorium, the individual is still expected to pay ongoing liabilities like their current rent to avoid accumulating new arrears.

Propertymark continues: “A key question for letting agents is how the Moratorium might affect possession proceedings for rent arrears. The proposed rules would not stop landlords from serving notice or applying to repossess a property due to arrears.

Propertymark supports this approach, observing that Scotland already has strong safeguards against unfair evictions. For example, landlords must follow pre-action protocols before evicting for arrears, and the First-tier Tribunal must judge if an eviction is reasonable, given the tenant’s circumstances.

“Measures in the Housing (Scotland) Bill will also require courts to consider delaying an eviction if carrying it out would harm the tenant’s health . Propertymark recommends that courts and tribunals be notified when a tenant under a Mental Health Moratorium is facing a rent-arrears eviction, ensuring the tenant’s health crisis is factored into decisions .

“Clear guidance should also be developed to help landlords and agents handle cases where a tenant in arrears is protected by a Moratorium to ensure a consistent, compassionate approach, balancing the tenant’s need for respite with the landlord’s need to address arrears.”