Asked by: Rebecca Paul (Conservative - Reigate)
Question to the Ministry of Justice:
To ask the Secretary of State for Justice, what guidance his Department provides to county courts on (a) the verification of documents submitted in support of Mental Health Breathing Space applications and (b) instances in which concerns have been raised that such documents may be forged or fraudulent.
Answered by Sarah Sackman - Minister of State (Ministry of Justice)
When a Breathing Space is cancelled, the creditor will be automatically notified by the Insolvency Service. They should provide a copy of this notification to the county court when they apply for any further enforcement action.
The decision on whether someone enters a Breathing Space Moratorium is not initially determined by the court but by a debt advice provider authorised by the Financial Conduct Authority or by a local authority (where they provide debt advice to residents). For a Mental Health Breathing Space, an Approved Mental Health Professional must certify that a person is receiving mental health treatment. If a creditor disagrees with a notification, there are grounds under which they can ask the debt advisor for a review. After a review, if the creditor does not agree with the decision, they can then apply to the court to cancel the breathing space.
If a creditor who has applied to the court is concerned about the validity of documents supporting a Mental Health Breathing Space, they should include supporting evidence as to why the documentation may be invalid in their application, verified by a statement of truth. Such applications are treated as a Part 8 claim by the court. The evidence will be considered by a judge who will make the decision.
Asked by: Rebecca Paul (Conservative - Reigate)
Question to the Ministry of Justice:
To ask the Secretary of State for Justice, what steps he plans to take to help ensure that county courts update their records to reflect the cancellation of Breathing Space certifications.
Answered by Sarah Sackman - Minister of State (Ministry of Justice)
When a Breathing Space is cancelled, the creditor will be automatically notified by the Insolvency Service. They should provide a copy of this notification to the county court when they apply for any further enforcement action.
The decision on whether someone enters a Breathing Space Moratorium is not initially determined by the court but by a debt advice provider authorised by the Financial Conduct Authority or by a local authority (where they provide debt advice to residents). For a Mental Health Breathing Space, an Approved Mental Health Professional must certify that a person is receiving mental health treatment. If a creditor disagrees with a notification, there are grounds under which they can ask the debt advisor for a review. After a review, if the creditor does not agree with the decision, they can then apply to the court to cancel the breathing space.
If a creditor who has applied to the court is concerned about the validity of documents supporting a Mental Health Breathing Space, they should include supporting evidence as to why the documentation may be invalid in their application, verified by a statement of truth. Such applications are treated as a Part 8 claim by the court. The evidence will be considered by a judge who will make the decision.
Asked by: Rebecca Paul (Conservative - Reigate)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the effectiveness of safeguards in the online application process for the Breathing Space debt respite scheme in preventing fraudulent or duplicate applications by the same individuals.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Breathing Space Scheme gives debtors the space to engage with professional debt advice, or to receive crisis treatment for a mental health condition.
A standard breathing space provides people in problem debt with protections from creditor enforcement action for a period of 60 days. It can only be started if a regulated debt adviser assesses the individual to be eligible and that a breathing space would be appropriate for them. This includes ensuring the individual has not been in a standard breathing space in the last 12 months.
In recognition of the link between mental health and problem debt, eligible individuals receiving mental health crisis treatment can access a mental health crisis breathing space (MHCBS) which provides the same protections from creditor enforcement for the duration of the individual’s crisis treatment. A MHCBS can only be started if an Approved Mental Health Professional confirms that the individual is receiving mental health crisis treatment. The debt adviser must also seek confirmation from a nominated point of contact every 30 days that the individual is still receiving eligible mental health crisis treatment in order for the individual to continue to receive the moratorium’s protections.
HM Treasury does not issue guidance to police forces on the handling of alleged abuse or fraudulent use of the Breathing Space scheme. However, HM Treasury does provide guidance for creditors. This outlines that where a creditor considers that an individual or a specific debt does not qualify for a breathing space, or that the debtor has enough funds to repay their debts, they can ask the debt advice provider to conduct a review within 20 days of the breathing space starting. Creditors also have the right to apply to a court at any time for permission to take enforcement action in relation to a debt included in a breathing space.
The Government keeps the scheme under review to ensure it is operating as intended.
Asked by: Rebecca Paul (Conservative - Reigate)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential merits of introducing a mechanism for creditors to seek redress where a Breathing Space certification has been incorrectly granted and financial loss has resulted.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Breathing Space Scheme gives debtors the space to engage with professional debt advice, or to receive crisis treatment for a mental health condition.
A standard breathing space provides people in problem debt with protections from creditor enforcement action for a period of 60 days. It can only be started if a regulated debt adviser assesses the individual to be eligible and that a breathing space would be appropriate for them. This includes ensuring the individual has not been in a standard breathing space in the last 12 months.
In recognition of the link between mental health and problem debt, eligible individuals receiving mental health crisis treatment can access a mental health crisis breathing space (MHCBS) which provides the same protections from creditor enforcement for the duration of the individual’s crisis treatment. A MHCBS can only be started if an Approved Mental Health Professional confirms that the individual is receiving mental health crisis treatment. The debt adviser must also seek confirmation from a nominated point of contact every 30 days that the individual is still receiving eligible mental health crisis treatment in order for the individual to continue to receive the moratorium’s protections.
HM Treasury does not issue guidance to police forces on the handling of alleged abuse or fraudulent use of the Breathing Space scheme. However, HM Treasury does provide guidance for creditors. This outlines that where a creditor considers that an individual or a specific debt does not qualify for a breathing space, or that the debtor has enough funds to repay their debts, they can ask the debt advice provider to conduct a review within 20 days of the breathing space starting. Creditors also have the right to apply to a court at any time for permission to take enforcement action in relation to a debt included in a breathing space.
The Government keeps the scheme under review to ensure it is operating as intended.
Asked by: Rebecca Paul (Conservative - Reigate)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what guidance her Department provides to police forces in England regarding the handling of cases where there has been an alleged abuse or fraudulent use of the Breathing Space scheme.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Breathing Space Scheme gives debtors the space to engage with professional debt advice, or to receive crisis treatment for a mental health condition.
A standard breathing space provides people in problem debt with protections from creditor enforcement action for a period of 60 days. It can only be started if a regulated debt adviser assesses the individual to be eligible and that a breathing space would be appropriate for them. This includes ensuring the individual has not been in a standard breathing space in the last 12 months.
In recognition of the link between mental health and problem debt, eligible individuals receiving mental health crisis treatment can access a mental health crisis breathing space (MHCBS) which provides the same protections from creditor enforcement for the duration of the individual’s crisis treatment. A MHCBS can only be started if an Approved Mental Health Professional confirms that the individual is receiving mental health crisis treatment. The debt adviser must also seek confirmation from a nominated point of contact every 30 days that the individual is still receiving eligible mental health crisis treatment in order for the individual to continue to receive the moratorium’s protections.
HM Treasury does not issue guidance to police forces on the handling of alleged abuse or fraudulent use of the Breathing Space scheme. However, HM Treasury does provide guidance for creditors. This outlines that where a creditor considers that an individual or a specific debt does not qualify for a breathing space, or that the debtor has enough funds to repay their debts, they can ask the debt advice provider to conduct a review within 20 days of the breathing space starting. Creditors also have the right to apply to a court at any time for permission to take enforcement action in relation to a debt included in a breathing space.
The Government keeps the scheme under review to ensure it is operating as intended.