The legalities of asking for breathing space from creditors

Take time out to solve your debt problems

How to ask for 30 days of breathing space to come up with an action plan to reduce your debts.

10 per cent of people in debt reveal that poor mental health including symptoms of anxiety and depression makes it difficult to manage their money and pay off their existing bills. These statistics were released as part of the World Mental Health Day campaign to raise awareness of the link between stress and financial difficulties. For those in debt, there are positive steps you can take to improve both your financial situation as well as your mental health – one of these is the option of asking for breathing space from your creditors.

The purpose of breathing space

When you’re in debt, you may receive frequent communication from creditors by phone, letter or email requesting payment to settle your outstanding bills. If you’re feeling overwhelmed by this communication and can prove that you’re taking positive steps to resolve your debt problem, then you may legally request that your creditors provide you with breathing space. This space is usually a 30-day period which allows you to get in touch with debt advisors and provides you with the necessary time to put together a plan of action to improve your current financial situation. Your breathing space should give you ample time to focus on what your immediate next steps are.

Asking for breathing space

When you’re ready to put together a positive plan to solve your debts, you should get in touch with your creditors and request the option of taking breathing space. Legally they may not be able to stop all communication with you, as some correspondence such as statements will be required to be sent to you by law. They may also request that you provide them with proof that you’re seeking guidance and are making a concerted effort to sort out your existing debts. If you have taken on an extra job, then you can offer evidence of your additional income, or alternatively if you have spoken to a debt advisor then you can provide your creditor with the reference number given to you during your call.

Are creditors required to offer breathing space?

Most large creditors adhere to industry regulated codes of practice including the Credit Services Association code of practice, the Finance and Leasing Association lending code and the Lending Standard Board lending code. Creditors who are part of these organisations should typically agree to providing you with the accepted 30-day breathing space. If you feel that you need more time than this, you can apply for a further extension of 30 additional days.

If your breathing space application is rejected

Not all applications for breathing space will be accepted.

A professional debt collection agency explains that leeway is usually offered to help settle consumer debt such as credit card bills, personal loans, car finance and bank debts. In the event that your breathing space application is denied, you are within your legal rights to make a complaint to your creditors. You should keep copies of all correspondence as evidence of your written complaint. However, it’s important to note that breathing space would not usually be granted for higher level ‘priority’ debts including council tax arrears, fines, court decrees or judgements, or child maintenance arrears.

Taking positive steps towards solving your debt problems is an important approach to improving your mental health. If you feel that you’d like time to come up with a proactive plan to get out of debt, then contact your creditors to apply for breathing space today.

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