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Debtors get 30 day breathing space

Debtors get 30 day breathing space

Category: Credit cards

Updated: 07/04/2009
First Published: 06/04/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Debt collectors have agreed to give 30 days' breathing space to borrowers struggling to repay debts.

The new rule means that debt collection agencies will not contact debtors to pursue debts for 30 days, once they have been informed that an accredited debt advisor has taken on the case.

This will allow the advisor to negotiate with creditors and the collection agency so that a plan for repaying the debt can be agreed.

The news comes on the day that debt relief orders come into effect, allowing people on low incomes with limited debts who could not previously afford to go bankrupt to write off their debts and start again after 12 months.

"We want anyone in difficulty to be able to access the help they need," said Consumer Affairs Minister Gareth Thomas. "We know that many people are already struggling to stay on top of their bills and pay their debts so we are taking action to ensure consumers are in control of their finances and are treated fairly."

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