Room to breathe – why the Debt Respite Scheme isn’t cause for concern

In this weeks Leading the Way blog, we consider the Breathing Space initiative coming into effect today and assess the level of impact this is expected to have on the enforcement industry.  

It may seem a strange comparison but the Debt Respite Scheme has been compared by some to the Millennium Bug. The anxieties felt by some people approaching the 21st century included fear of the unknown, lack of trust in technological capability and exposure to niche groups declaring the end is nigh. The worries of that time are now dismissed as nonsense, but in actuality, there was no impact because people were prepared. The work to mitigate the bug’s projected effects had already been done and we are confident that the same will be true after today’s launch of Breathing Space. Ongoing accountability will ensure normal service continues.  

Enforcement firms, debt advisors and local authorities who continue to take their responsibilities seriously should not have any cause for concern. In a previous blog post, we outlined the different types of Breathing Space to be aware of and what this means. Much in the same way that we offer training to debt advice personnel or how our Enforcement Agents refer vulnerable people to welfare teams daily, Breathing Space is another example of how antagonistic perceptions are not always an accurate reflection of common goals and directives. The collaboration, flexibility and adaptability that allowed enforcement to resume and succeed during COVID-19 is a prime example of what the industry is capable of implementing.  

Communication over confusion 

At Bristow & Sutor, we held two webinar sessions last month discussing the Debt Respite Scheme which was attended by over 268 unique attendees. In our post-webinar feedback survey, it was suggested that new information (unknown before attendance) contributed to 53% of the content included. This was significant as all of the information discussed was already freely available, but perhaps was not accessible for everyone to fully understand. We will continue to foster conversations around the help and support available whenever this is appropriate.  

We have now created a helpful guide that shows our customers and clients how easily and quickly they can inform us when a case previously sent to us moves into Breathing Space. There is no reason why this process cannot be followed when it needs to be and we expect similar processes to be in place between other enforcement firms and their customers.  

Despite some confusion amongst some in the parking sector, the Insolvency Service has confirmed our understanding that PCN debts are eligible debts in Breathing Space from the point of issue and do not need to be registered as a debt to be included. As such we will continue to share the Traffic Enforcement Centre (TEC) guidance and regulations provided for the Debt Respite Scheme wherever this is necessary too.  

Expectations vs reality  

Every consultation we have had across all aspects of the industry have indicated the volume of requirements generated by Breathing Space will be handled without any problems. Part of this can be attributed to the fact that the debt advice sector does not appear fully convinced by the scheme in its current format. This is mainly because individual circumstances vary, can often be complex and there is no one-size-fits-all complete solution that can ever be applied to definitively improve outcomes for everyone. As such, it is not expected that this scheme will be utilised heavily, as advisors are not likely to recommend an avenue to debtors that they do not have faith or confidence in themselves.  

It is important to remember that debtors can only be granted this after being assessed by a qualified debt adviser and not every person who makes an application will be deemed appropriate. If a person can afford to pay their debts with simple budgeting adjustments or easily sold assets, an application is highly unlikely to be applied. This is not to say there will not be some cases where the parameters set out would be beneficial and will be identified as the correct way forward. It is essential therefore that all parties involved remain prepared to support people as soon as this is necessary, even if this is not expected to be a regular occurrence. 

No drastic change 

Whilst we cannot enforce a debt during a Breathing Space, a debtor is still legally required to pay their debts and liabilities. It is incredibly important to emphasise and recognise the regulation changes now in place do not change what customers are contracted to pay. The fundamental purpose of this legislation is to support those who genuinely cannot pay or are vulnerable, which is something that all responsible enforcement firms should already do.  

At its core, the Debt Respite Scheme is an additional component to the existing toolkit of the debt advice sector, with whom we already work very closely to ensure those in vulnerable circumstances receive the support they need. As long as this important subject continues to be treated with the right levels of respect and commitment, adhering to Breathing Space requirements should be as simple for firms and customers as any other process already in place.  

Bristow & Sutor remains fully committed to its ethos of being cool, calm and collected.