Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent steps she has taken to ensure local councils adhere to creditors' responsibilities when debtors are under a Debt Respite (Breathing Space) period.

The Breathing Space Scheme was launched in May 2021 to give those in problem debt the space to engage with professional debt advice by providing a temporary relief from creditor enforcement action.

The scheme guidance for creditors sets out their responsibilities when a debtor enters a breathing space and makes clear that, upon being notified, creditors must stop all enforcement action, pause contact with the debtor, and freeze most interest and charges for the duration of the breathing space.

Where a creditor does not comply with the terms of the breathing space, any enforcement action they take is not valid and they may be liable for the debtor’s costs. The debt adviser will also notify the Insolvency Service which administers the scheme, so that the creditor can be reminded of their obligations. Debtors are also able to go through their creditor’s formal complaints procedure and, if relevant, escalate to the appropriate ombudsman or oversight body.

Councils are responsible for the collection of a broad range of debts and are required to recover all debts in accordance with the law.