Six-week breathing space from the bailiffs
People in debt will be able to apply for legal protection from interest charges and enforcement action
THERESA MAY is poised to introduce a six-week respite to protect people saddled with debt from bailiffs and legal action, The Sunday Telegraph can disclose.
The Prime Minister will honour a manifesto commitment to introduce the so-called “breathing space” scheme, as well as a statutory repayment plan for those in serious debt.
Campaigning organisations have welcomed the move, saying that the attitude of “the harder you push the more money you get back” no longer holds.
Martin Lewis, founder of Money Saving Expert, said: “This is incredibly welcome. It is a win-win-win scenario. It is a win for the individual, because they will have six weeks in which the pressure is taken off and they are able to organise their finances and get in a better position without extra charges and interest and being pestered.
“It is a win for the lenders because the truth is when people are in crisis they cannot repay their debts. This will actually increase the likelihood of repayment.
“And it is a win for society because debt is a huge cause of problems, it has a huge impact on mental health.”
The “breathing space” scheme will only be for people who are using advice from regulated debt advisers, the Government will say.
During the six-week period, people will be able to apply for legal protection from further interest charges and enforcement action. They will also be offered a statutory repayment plan.
The announcement will be seen as an attempt by Mrs May to meet Jeremy Corbyn head on and win over support from workers.
It follows her declaration at the Conservative conference in Birmingham that austerity is over. During her keynote address, she set out her vision for post-Brexit Britain and promised voters that “better days” lie ahead.
“After a decade of austerity, people need to know that their hard work has paid off,” she said earlier this month.
“Because of that hard work, and the decisions taken by the Chancellor, our national debt is starting to fall for the first time in a generation.”
Mrs May told the conference that her party had cleaned up the mess left by Labour in the wake of the financial crash and was now steering the country to a brighter future.
The “breathing space” scheme will also be seen as an attempt by Mrs May to come good on her promise to help working families who are “just managing”.
Following the snap election of 2016, she said that for an “ordinary working class family” life is “much harder than many people in Westminster realise”.
She pledged to “fight against the burning injustices” of poverty, race, class and health and give people back “control” of their lives.
The Treasury launched a consultation on how the “breathing space” scheme should work a year ago, asking how it should work, how long the period of grace should be and how problem debt would be defined.
Mr Lewis added: “I have to be straight – those of us who campaigned said that six weeks isn’t long enough and 12 weeks is the consensus.”
An HM treasury spokesman said: “We are committed to helping people overwhelmed by debt by giving them the time they need to seek advice and get their lives back on track.
“We will announce more details in due course.”