This May, debtors will be able to apply for so called ‘Breathing Space’ which does pretty much what it says on the tin. The type of Breathing Space they can apply to the court for falls into two categories:
Standard Breathing Space
Mental Health Breathing Space
We wanted to take this opportunity to inform our clients what we can and can’t do on their behalf, whilst a debtor is using Breathing Space. Firstly, and as a separate point, #TeamCES recognises the significance of the Breathing Space scheme in protecting the vulnerable, and whilst it may be exploited by some who don’t truly need it, it could be a lifeline for those who really do...
...and so, the industry needs to work within these parameters, rather than pushing against them.
To our clients, we must request that as soon as you are informed of a debtor receiving a Breathing Space order, that you let us know so that we can update our processes accordingly.
If a debtor receives a standard Breathing Space, we are unable to enforce in any way for 60 days, whilst if a debtor receives a Mental Health Breathing Space, we are unable to take any action for the duration of the person’s treatment (plus 30 days) no matter how long that treatment lasts.
What do we mean by ‘unable to enforce’ and ‘unable to take any action?’
Well, quite simply, during a Breathing Space, we are unable to:
Collect or enforce a Breathing Space debt
Give any kind of notice about collecting or enforcing the debt
Attempt to enforce a judgment or order issued by a court or tribunal, before or during the Breathing Space (unless the court's permission has been granted)
Obtain a warrant or writ
Visit the debtor’s home or business to take their goods (in person or virtually)
Sell or take control of the debtor's property or goods.
Serve a notice to take possession of a property let to the debtor on the grounds of rent arrears
due up to the start of the Breathing Space; or take possession of a property let to the debtor having served such a notice prior to the start of the Breathing Space
Contact the debtor about the enforcement of a Breathing Space debt
All of that said, a Breathing Space is not the same as a payment holiday, meaning that any scheduled payments as part of a debtor’s payment plan, should still be expected to be made, irrespective of the type or duration of the specific Breathing Space.
Our clients have had the patience of saints this last fourteen months, and even though things are starting to move, a little more patience is going to be required in the months to come.
The most important thing to remember, is to inform #TeamCES as and when you receive notification of a Breathing Space being granted to a debtor.
We’ll get through this together, no matter how long it takes.