Debt Charities Welcome Government Focus on ‘Breathing Space’ and Interest-Free Loan Initiatives
October 30, 2018
Indebted Brits could soon be legally protected from their creditors for several weeks at a time and given the chance to borrow money on an interest-free basis.
At least that’s if the government continues to move forward with ideas and initiatives currently being discussed with the aim of providing more support to people who find themselves in perilous financial situations.
Details of the government’s latest thinking on these issues were revealed as the chancellor Philip Hammond gave his Budget speech to the House of Commons in Westminster.
Consultation processes have already been conducted by the government with regard to the idea of giving indebted consumers a chance to be fully protected from their creditors for a period of around six weeks.
Further consultations are now planned for the ‘breathing space’ initiative as policymakers move closer to the point of bringing in legislation that officially gives problem debtors those added protections.
Meanwhile, feasibility studies and pilot schemes are being readied in relation to interest-free loans, which could soon give indebted consumers a chance to borrow money without charge as a means of trying to turn around their financial situations.
The debt help charity StepChange has welcomed the government’s announcements on these issues and suggested that a “creative and innovative approach” could go a long way towards helping a great many British consumers avoid and overcome serious debt problems.
“With the launch today of a consultation on a debt breathing space scheme – something that we have campaigned for since 2014 – the vital scheme is now heading towards becoming a reality,” said Richard Lane from StepChange.
“This will help to address problem debt, and while the detail needs careful consideration, it is particularly welcome that government debts will be included in the scheme.”
Joanna Elson OBE, chief executive of the Money Advice Trust, said in a statement: “The government’s ‘breathing space’ scheme has the potential to be a game-changer for the fight against problem debt.
“Too many people fall into a vicious cycle of debt that starts by the need to borrow a small amount for something essential like a fridge or a cooker – with high interest and charges quickly turning small debts into big problems. It’s vital that we improve access to affordable credit for those who need it.”
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