Response: Breathing space scheme for people in debt

By: Rhea Newman  Published: January 2018


Shelter response to HM Treasury on the proposal for a breathing space scheme and statutory debt repayment plan for people in problem debt.

Summary

Shelter regularly witnesses the detrimental impact debt can have on people’s lives. In 2016-17, Shelter supported over 14,000 people, via its telephone helpline and face to face services, who had a financial issue and Shelter’s British Gas Energy Trust debt advice service and Housing Debt Casework Team worked with almost 3,000 clients in 2017.

As a housing advice provider, with a number of specific debt advice services, we welcome the introduction of a breathing space scheme and statutory debt repayment plan. A well-designed scheme could provide many individuals and families experiencing housing debt with the time to seek proper advice and find a suitable solution. This would offer significant benefits for those in debt as well as creditors.

Rather than responding to each individual question, we have set out below the features we believe would be important in any successful breathing space scheme and statutory repayment plan.
In particular, Shelter feels any breathing space scheme and statutory debt repayment plan should:

  • Be open to anyone in problem debt, if identified as appropriate for their circumstances by a regulated debt adviser.
  • Operate consistently across all types of debt, including debts owed to public bodies and Government departments.
  • Be sufficiently flexible to maximise people’s chances of repaying their debts.

The final section urges the Government to ensure its own policies help to prevent rather than worsen debt. Otherwise, the introduction of any initiatives to support people in debt, will be of limited value.

Download

Download the full document: