Which debts does Breathing Space cover?
Most personal debts are protected, but some are left out and a few are only partly covered. The detail matters most for council tax, secured loans and joint debts.
Applies to: England & Wales
What to do now
- List every debt in Find My Debts so the adviser can include them all.
- Keep paying debts and bills that are not covered.
- Tell your adviser straight away if you find a debt you missed.
Usually covered
- Credit cards, store cards, personal and payday loans, overdrafts, catalogues and buy now pay later.
- Arrears on energy, water, phone and broadband bills.
- Rent arrears and mortgage or secured loan arrears that exist on the start date.
- Council tax arrears, once they have fallen due (see below).
- Most debts to government, including HMRC tax debts and DWP overpayments.
- Parking penalty charge notices — these are not treated as court fines.
- Debts already with a collection agency, or where there is a county court judgment.
Not covered
| Debt | What happens |
|---|---|
| Mortgage, secured loan or hire purchase | Only the arrears at the start date are covered. Interest can still build on the main secured balance, but not on the arrears. |
| Fines imposed by a court | Not covered, including interest and penalties on them. |
| Student loans | Not covered. |
| Child maintenance and family court orders | Not covered. |
| Social Fund crisis or budgeting loans, Universal Credit advances | Not covered. |
| Debts from fraud, confiscation orders, damages for death or personal injury | Not covered. |
| New debts taken on during the Breathing Space | Generally not covered. |
Council tax: the timing matters
Council tax that has not yet fallen due is not covered. Once you have had a reminder, or the whole year’s bill has become due because you lost the right to pay by instalments, the unpaid balance can be included. Instalments for the current year that fall due during the Breathing Space are an ongoing cost you must keep paying. Council tax debt.
Joint debts and guarantors
A joint debt can go into your Breathing Space even if the other person does not apply. They are then protected from enforcement on that debt, but the creditor can still add interest and charges to their side, and their own separate debts are not affected. A guarantor is not protected by your Breathing Space — the creditor may still ask them to pay, and they would need advice and a Breathing Space of their own.
Sole traders
Business debts can be included if you are a sole trader and give your trading details. They are excluded if you are VAT registered and the debt relates only to the business, or if you are in a business partnership. Self-employed debt.
Deductions from benefits
Creditors must tell the DWP about the Breathing Space so that deductions from older benefits for a covered debt can be paused. Third-party deductions already being taken from Universal Credit (for example for council tax, rent or energy) carry on, as do deductions for Universal Credit advances. DWP’s own recovery of non-fraud Universal Credit overpayments should be paused. Council tax deductions from benefits.
You never have to pay for debt advice. MoneyHelper (government-backed), StepChange, National Debtline and Citizens Advice all give free, confidential advice with no obligation.
Common questions
Does Breathing Space cover council tax?
Yes, for arrears that have fallen due, for example after a reminder or once the whole year's bill is due. The current year's instalments that fall due during the Breathing Space must still be paid.
Does Breathing Space cover my mortgage?
Only the arrears that exist when it starts. You must keep up your normal monthly mortgage payments, and interest can still be charged on the main balance.
Are HMRC debts covered by Breathing Space?
Most tax debts owed to HMRC are qualifying debts. Some business debts are excluded, such as debts that relate only to the business if you are VAT registered, or if you are in a partnership.