CCH – 60 Day Breathing Space

As many of you may recall, in 2018 creditors were dealt a blow by the Government in the form the of Pre-Action Protocol for Debt Claims which meant that debtors, including individuals and sole traders, would be granted with a 30 day period whereby no action could be taken against them. This period was extendable by a further 30 days if the debtor requested more information, documents or if they were consulting a debt charity.

On 4 May 2021, creditors will be dealt another blow in the form of a government scheme whereby consumer debtors in problem debt would receive, automatically, a 60 Day Breathing Space which means that creditors can no longer pursue these individuals after a month has passed. In reality, this may mean that monies are outstanding for 3+ months before any action is taken, when taking into account many creditor’s internal collection efforts or policies.

Creditors should also be aware that not will debtors have a 60 day period of relief, but during this period creditors cannot levy any interest or fees, which may mean the collection process will become more expensive given you cannot levy any of these charges to reduce the cost in recovery. As we all know, many man hours often go into collecting overdue balances.

Furthermore, it appears that once this scheme comes in, it may be that problem debtors are entitled to this 60 day period even if you have already commenced recovery as the government has stated, rather ambiguously, that debtors will be protected from enforcement action from creditors. This may therefore put a spanner in the works, but more clarity on this is needed from the Government.

Additionally, those with mental health issues will also benefit from extra protection beyond the 60 days and these debtors do not even need to seek debt advice during the 60-day period. Instead, they will continue to receive the same breathing space protections, which will last for the whole of their treatment. This potentially means that you will never be able to commence formal collections efforts against those who are in treatment on a permanent basis, especially considering the limitation period of 6 years. This may therefore mean that your bad debt write-offs will increase in regard to these particular debtors.

The 60-day breathing space captures most of the problem debt that many people struggle with, including money owed to central and local government such as council tax arrears, loans, credit cards and benefit overpayments.

This new scheme comes into force in 2021 and inevitably requires you to consider the impact on your business. If you would like advice on this, or any debt recovery matters, contact us at

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