Hundreds of people across the East Midlands may soon have a better chance of solving their money problems following the government’s plan to introduce a new ‘breathing space’ to allow those struggling with debts extra time to get their finances in order.
This is the view of the Midlands branch of insolvency trade body R3, after the Treasury confirmed that help for those in debt will now be the subject of a consultation, and should then become law by 2019.
“The new ‘breathing space’ proposals, which R3 has been advocating for several years, will prescribe that those people affected by debt would be exempted from further interest, charges and enforcement action for a period of up to six weeks,” said R3 Midlands Chairman Chris Radford, a partner at Gateley in Nottingham.
“This will give them a chance to seek advice and find financial solutions which are appropriate for their situation.”
Recent research by R3 and ComRes shows that nearly two-in-five adults in the East Midlands say they are worried about their current level of debt, with half of these respondents citing credit card repayments as the reason for their worries.
Almost two-in-five adults in the region say they often or sometimes struggle to pay day, with the cost of food highlighted by a third of these respondents as a key reason for their cash flow difficulties.
A quarter cite household energy costs, excluding petrol and diesel, as a cause of their pay day struggles, with the same proportion listing spending on going out or non-essential items as a reason.
“A breathing space is an opportunity for people to access the impartial, unpressured advice they need about their finances and the options they have for resolving their debts at a crucial time,” added Radford.
“Too often, people can’t access the right advice or can be pressured to take action before receiving advice, and they can end up in a debt solution inappropriate for their needs, which only makes their financial problems worse.
“While any breathing space should be seen a last chance to seek help and must find a balance between the person in debt and their creditors, introducing such an option would benefit both parties.
“If people find it easier to access a debt solution that suits their situation, they can repay more money to creditors and get back on their feet much more quickly, no longer burdened by debt.
“Money problems can hit anyone at any time for many different reasons, and taking steps towards controlling your spending and debt levels, rather than putting your head in the sand in the hope that your problems will go away, will maximise your chances of putting things right in the shortest possible time.”