THE GOVERNMENT is being urged to put a 'Breathing Space' scheme into place to help people who are mired in debt.
Leeds North West MP Greg Mulholland has joined calls in parliament for the introduction of the scheme which is supported by The Children’s Society and StepChange Debt Charity. Under the proposals people seeking debt advice would be given a 12-month legal protection from mounting interest, charges and enforcement action. The scheme would build on protections offered under the Debt Arrangement Scheme in Scotland, which has made sure that families sticking to an affordable repayment plan agreed with their creditors are not harried or hassled for the duration of that plan.
Mr Mulholland said: "It can't be right that children's mental health and happiness is suffering as a result of creditors unfairly escalating people’s debt problems.
"Families in problem debt need time and space to get back on their feet. By providing a period free from additional interest, charges and enforcement action, a new Breathing Space scheme would help families recover their financial situation and put in place a plan to affordably repay their debts.
"I’m pleased that the Breathing Space proposal has widespread cross-party support, including from the Work and Pensions Select Committee and the APPG on Debt and Personal Finance. The Government now needs to act by putting a comprehensive Breathing Space scheme in place."
The calls for the scheme to help thousands of families regain control of their finances are being made as data from the Bank of England shows unsecured household debt rising at its fastest rate since the financial crisis.
The rise in personal borrowing has led to mounting concern that households who get into debt need safer ways to manage financial difficulties.
In Leeds North West alone, an estimated 1,024 families with 1,785 children are said to be living with problem debt. Analysis from The Children’s Society shows that children in low-income families with multiple debts are more likely to suffer from mental health problems than equivalent families with fewer debts.