Help for those in debt will be the subject of a consultation, and will become law by 2019, the Treasury has confirmed.

Following pressure from the House of Lords for amendments to the Financial Guidance and Claims Bill, people with problem debt could be given six weeks of breathing space and exempted from further interest charges and enforcement action.

The plans also include better legal protection for debtors once a repayment plan is in place.

Adrian Hyde, president of insolvency trade body R3, said: “Introducing a breathing space would benefit everyone involved: both the indebted individual and their creditors. 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 quicker, no longer burdened by debt." 

However, he also noted that any breathing space must find a balance between the person in debt and their creditors.

Read more

• Gov.uk: Breathing Space: a call for evidence
• R3: Insolvency profession welcomes government breathing space plans
• FCA survey reveals 4.1 million people in financial difficulty