GET 60 DAYS BREATHING SPACE ON YOUR DEBT

JANUARY is a rotten month financially. Debts mount up and the month seems to go on for ever before pay day.

If you’re wondering whether you will ever getting on top of your finances, contact a free debt advice agency for help, such as StepChange, Citizens Advice, National Debtline, Community Money Advice (CMA) or Christians Against Poverty.

Depending on your situation, these agencies can give you access to a number of debt solutions that you couldn’t get on your own.

For example, you could be given breathing space under the Government’s Debt Respite Scheme, which allows you time to receive advice and find a solution.

John Franks, chief operating officer at Community Money Advice (CMA), explains: ‘There are two kinds of “breathing space” you could get. There’s standard breathing space, where most creditors will have to stop collection and enforcement of your debts. Creditors will also have to freeze interest and charges on any eligible debts.

‘Then there’s mental health crisis breathing space, which can provide extra protection for people receiving specific treatment.’

To be eligible for standard breathing space, you must be unable to repay some or all of your debts when they need to be paid. It will last for 60 days. If things look so bad that even a 60-day breathing space won’t help, you could apply for a Debt Relief Order (DRO). The advantage of this is it costs £90 (as opposed to £680 for bankruptcy in England and Wales).

Breathing Space and DROs do not apply in Scotland but other options apply, such as Minimal Asset Process (MAP) and the Debt Arrangement Scheme (DAS).