The Debt Respite Scheme gives people who receive professional debt advice access to a 60-day period in which interest, fees and charges are frozen and enforcement action is paused.  For people receiving mental health crisis treatment, the moratorium may be accessed for the duration of their crisis treatment.

The scheme will be introduced in May 2021. The timing of its introduction coincides with several relief and support schemes ending, including JRS (Furlough) and deferral of tax payments and first payments on government business support loans (CBILs and BBLs) will be required.

But Ms Brittain warns, “the introduction of The Debt Respite Scheme next year increases the difficulties in tackling fraud, by making it easier for those who have no intention of paying their debts to delay and move assets away from their creditors.

“Creditors will find pursuing offenders towards bankruptcy that much more challenging. With the same bankruptcy rules apply to individuals owing £50,000 or £50 million, it greatly assists those who are avoiding their creditors by delaying the final bankruptcy adjudication even more. This won’t just apply to those debtors in genuine hardship, which the legislation was intended to support.

“It’s going to make creditors less likely to enforce their debts through the bankruptcy courts and my fear is creditors are going to want greater security and use more rigorous enforcement action via bailiffs rather than rely on the court system, which by its nature is fair. If it becomes ineffective then landlords and other creditors may well take matters into their own hands.”