Chris Sykes and Sarah Mills of Shelter’s Specialist Debt Advice Service answer your questions on when a person can enter a mental health crisis moratorium and how to apply.
Published November 2023.
Regulation references in this summary are to the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.
My client has mental health problems – can they have a mental health crisis moratorium?
Unfortunately, it can be more complicated than that. To be eligible for a mental health crisis moratorium (MHCM) a debtor must be receiving mental health crisis treatment.
This could mean inpatient hospital treatment or in some cases, community treatment.
A debtor is classed as receiving mental health crisis treatment under regulation 28(2) when they either:
have been detained in hospital for assessment under sections 2 or 4 of the Mental Health Act 1983
have been detained in hospital for treatment under section 3 of the Mental Health Act 1983
have been removed to a place of safety by a police constable under sections 135 or 136 of the Mental Health Act 1983
have been detained in hospital for assessment or treatment under sections 35, 36, 37, 38, 45A, 47 or 48 of the Mental Health Act 1983
are receiving any other crisis, emergency or acute care or treatment in hospital or in the community from a specialist mental health service in relation to a mental disorder of a serious nature
Applying for a mental health crisis moratorium
An application for a MHCM must be supported by evidence from an approved mental health professional. The debt advice provider must then consider whether the client is eligible for the MHCM under regulation 30(2).
The debtor can make their own application for a MHCM. Regulation 29 (1) also provides a list of other people who can apply on their behalf, including a carer, a mental health nurse, or a social worker.
Issues with mental health crisis moratoriums
People can stay in a MHCM for an indefinite period. Most of the Debt Respite Scheme case law has involved debtors in a MHCM rather than a standard breathing space, as creditors are at a greater disadvantage. With standard breathing space, a creditor can simply wait for 60 days before they enforce the debt. With a MHCM, they could wait months or even years.
The uncertain duration of a MHCM could make a creditor more aggrieved, and so more likely to request a review.
A creditor can request under regulation 17 that the debt advice provider reviews whether the MHCM should continue. If the debt advice provider does not cancel the MHCM, the creditor can apply to court. The court has the power to cancel the moratorium under regulation 19.
We recommend that you refer eligible clients to Rethink’s Mental Health & Money Advice Service. They are specifically funded and trained to advise and assist clients apply for a MHCM.
Can my client enter a breathing space moratorium and then enter a mental health crisis moratorium?
Yes, but only after the breathing space moratorium has ended.
Regulation 30(3)(g) states that a client is not eligible for a MHCM while they are in a breathing space moratorium.
An application for a MHCM can only be made the day after the breathing space moratorium ends. The MHCM then takes effect the next business day after an entry has been made on the register. This means that there will be a short gap between the breathing space moratorium ending and the MHCM starting.
My client has recently come out of a mental health crisis moratorium but is still in crisis. Can they have a further MHCM?
In theory, yes. Regulation 30(3) provides the eligibility criteria for mental health crisis moratoriums, and there is no limit on how many times a client can enter a MHCM. Where your client meets all the other eligibility criteria, and an approved mental health professional has provided evidence that they are receiving mental health crisis treatment, then a MHCM can be entered.
Regulation 30(4)(b) requires that the debt advice provider must consider whether a MHCM would be appropriate for the client.
When a MHCM commences, regulation 17 provides a 20-day window for a creditor to request a review. Each time a client begins a MHCM, a creditor has a fresh opportunity to challenge the moratorium and to consider an application to court. There have been cases in the courts where creditors have raised objections when debtors have had multiple MHCMs.
Does a client have to seek advice during a mental health crisis moratorium?
Regulation 16 provides that a debtor in a standard breathing space moratorium must engage with the debt adviser, however there is no such obligation on a debtor in a MHCM.
A client in a MHCM can choose to seek advice if they are able to do so.
What evidence does a debt advice provider need to determine that somebody is eligible for a MHCM?
The decision in the case of Kaye v Lees  EWHC 152 (KB) made it clear that the court might examine medical evidence to support the assertion that a debtor is receiving qualifying treatment., in addition to an Evidence of Mental Health Crisis Treatment (EMHCT) form.
HM Treasury updated its guidance for debt advisers following this case. The guidance states that the evidence provided in the EMHCT form will normally be enough. Further clarification should be sought where there is cause to doubt the client’s eligibility.
The guidance states that the debt advice provider 'should be satisfied that the information and evidence supplied by the approved mental health professional clearly shows that the client is receiving mental health crisis treatment that meets the required level of severity'.
Read a case summary of Kaye v Lees (2) on Shelter Legal.
How will a debt adviser know that a client is still receiving mental health crisis treatment?
When an approved mental health professional provides evidence of mental health crisis treatment, they must supply details for a nominated point of contact. This nominated point of contact could be themselves, or a colleague. The role is defined in regulation 2 as either an approved mental health professional, a care co-ordinator, or a mental health nurse.
During the MHCM, regulation 33 requires the debt advice provider to stay in regular contact with the nominated point of contact, to confirm either:
that the client is still receiving mental health crisis treatment
the date any treatment has ended
When will a mental health crisis moratorium come to an end?
Under regulation 32, a mental health crisis moratorium ends on the earliest of:
30 days after the day the debtor stops receiving mental health crisis treatment
30 days after the day the debt adviser does not receive a response from the nominated point of contact, following a request for confirmation of continuing crisis treatment
the day a moratorium is cancelled under regulation 18,19 or 34
A moratorium also ends the day after a debtor dies.