Due to the Covid-19 lockdown, there have been numerous changes to the possession process over the past year.
Just recently our colleague, Suzanne Bird, wrote about the end of the eviction ban, which means that court bailiffs can now proceed with evictions and tenants can again be made homeless. However, it’s not all doom and gloom for tenants.
More recently, Siddiq Fazaluddin and Jack Crown released a podcast explaining how the pandemic had affected the possession process and how tenants could take advantage of the changes and delays by planning ahead.
What is the Debt Respite Scheme?
On 4th May 2021 the government launched the “Debt Respite Scheme” to help those who are struggling financially. This scheme is also known as ‘Breathing Space’.
There are 2 effective options, as detailed below:
- A standard breathing space is available to anyone with problem debt. It allows them legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts.
- A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts).
The scheme is designed to give debtors more time to receive advice, plan and find a solution to resolve their debt problems. Planning ahead and securing additional time is something that may be particularly useful in addressing any rent arrears or impending possession action.
The coronavirus pandemic has had a significant adverse impact on people’s finances and if tenants face unmanageable rent arrears, this scheme could be used as a starting point to finding a long-term solution and “getting things back on track” financially or at the very least, regaining control of the situation.
The first step in the process is to speak to an approved debt adviser, available at the Citizens Advice Bureau, National Debt Helpline or Step Change. It can be as simple as sending an email to start off the process. Once in communication with the chosen organisation, the Debt Adviser assigned will work with the debtor to check eligibility and to ensure that Breathing Space is the most appropriate option for the situation. During the Breathing Space period the tenant should, where possible, continue payments towards their current rent as the contractual rent will still be due for payment.
The prospective benefits for tenants are that the landlord cannot commence any court action until the end of the Breathing Space period. This additional time could prove vital for tenants allowing them to explore further options to reduce the rent arrears such as local authority rent support schemes, ie Discretionary Housing Payments or discount schemes such as Council Tax reduction.
However the Breathing Space can only be used once in a 12 month period so it’s important that the time is productively. It’s not an open licence for the tenant to sit back and relax for 2 months as the debt will not simply resolve itself.
The success of the scheme ultimately depends on how the additional time is used. If used productively, it could avoid needless possession proceedings and the associated time and costs involved by promoting proactive and early intervention.
Tenants should also remember that even if they are not eligible for the scheme, there are always other option to consider. It’s worth contacting the landlord at the earliest possible stage in order to agree some sort of payment agreement. Small yet regular payments to the rent account are often viewed more favourably than large payments made on an ad hoc basis and only when the landlord applies some sort of sanction. Similarly, it’s worth taking legal advice at the earliest possible stage so the tenant is made aware of all their relevant options.
However, if no effective action is taken during the moratorium period, the tenant may find that they are simply postponing the inevitable possession claim only for it to reappear 2 months later.
If you are facing a possession claim our leading housing experts will be able to address any concerns you have and will assist and guide you through the entire legal process. Call us for free today on 0808 252 5231 to find out how we can help.