Struggling with debt? Ask a stepchange debt adviser a question

StepChange_Sylwia

https://forums.moneysavingexpert.com/discussion/comment/82054297#Comment_82054297

Hello and thank you for your further questions.

I'm sorry to hear that you haven't been able to move forward with this matter.

To answer your queries, I have used a format similar to your post, quoting some of the queries:

Is the application for Breathing Space made by me to the debt advisor (who then issues it) or is it an application to the insolvency service (who can decide not to issue it)? In my case i received the email with the BSS ref number (standard breathing space) and dates so is it active from the debt advisor or did the insolvency service not process it? Do the insolvency service check the 'application' or is that what the debt advisor does?”

When you apply for Breathing Space you have to do this through a debt advice organisation, who check for eligible debts and suitability for you and submit the application to the Insolvency Service. Your Breathing Space is usually approved and registered on the website within 24 hours. When you get the email with the BSS reference number, this is to confirm the Breathing Space has been activated. The Insolvency Service then contact the creditors within about a week. If there are any debt collection agencies or bailiffs acting for the creditor, it is the creditor’s responsibility to inform them. If there are any queries from creditors, however, the debt advice organisation would deal with them. They can also update the information on your Breathing space on the Insolvency Service portal. This could include adding or removing or updating debt details.

You asked if your Breathing Space was active or not - Unfortunately, we are unable to check if your Breathing Space is still active, as you have applied through another debt advice organisation.

We’d recommend that you contact Shelter to do this. You should also contact Shelter to ask if they have been contacted by the mortgage lender or their solicitor and to amend any errors on the application. When speaking to them, we would also recommend that you clarify (if you haven't already done this) that the debt in question is for an interest only mortgage where the term has ended already.

Whether the Breathing Space is still active, may also depend on whether there were other debts listed.

When applying for Breathing Space, did you tell the advisor about any other debts, apart from the mortgage? If you did, the Breathing Space would probably still be active and protections would apply for them. Also, if you had any other arrears on the mortgage, apart from the full mortgage balance, this could still be included and protected under the Breathing Space. Unfortunately, the mortgage company could still seek possession based on the mortgage term ending.

“If it's defective do the 60 days still apply, if the mortgage debt is in it does it still apply, if the mortgage debt is not in it can it be added but do the 60 days still apply etc.”

Breathing Space lasts for a maximum of 60 days from when it starts. It can end early, usually at the 30 day mid-point review or when a creditor objects to the Breathing Space. In this case, the Breathing Space can end or just the creditor in question removed.

“"We would recommend that you use any remaining time you have on the Breathing Space to contact the mortgage lender and try to come to an arrangement with them".

This is what I want to do but because they're not accepting the Breathing Space there is no 'remaining time'.”

We always recommend that our clients speak to their mortgage lender about the options available to them. They may be able to extend their mortgage term on a repayment basis, or come to some other arrangement to repay their mortgage.

We recommend that you do this as your mortgage term nears its end. It is possible that the mortgage company are not willing to negotiate now as your mortgage term has already ended.

Please note that even if your Breathing Space was successful, it would only pause the eviction process and you would only be able to remain in the property if you and the mortgage lender can come to an agreement. Whether the Breathing Space is valid or not, you need to use this time to discuss your options with his lender. Unfortunately, there's no guarantee at this stage that they will agree to a payment plan or to extend the mortgage term.

As per my original reply, you should contact Shelter again or Citizens Advice, for specialist advice, as they may be able to offer advice on appealing the possession, if they believe there are grounds to do this.

You could also contact the court and ask if you could be given more time to vacate the property, although this is not guaranteed at this stage.

Sadly, as things have got so far and if you haven’t got a realistic chance to be able to re-mortgage or extend the term of the property, we would recommend that you look for alternative accommodation. If there are no friends or family who can help, and if you are currently unable to find a private rented property, you should contact your local council or Shelter for emergency accommodation.

Hope this helps to clarify some things.

Sylwia

Sakman21

Hello, I am writing on behalf of my Mum, for whom I have an enduring power of attorney. I recently became aware of the issue my Mum is facing with Debt. Mum inherited my late father's debt when he died 19 years ago. She has been in an arrangement with Cabot Financial for the last 18 years and has only been able to pay the minimum amount. Her income is solely from her state pension and a small amount from my late father's pension. She lives in rented accommodation and has no assets. Her total income excludes her from any benefits other than attendance allowance. Mum will be 80 this year and is in ill health and worries very much about any contact from Cabot. I have taken over all contact with agencies, etc and am now wondering what Mum's next options are. The debt is approx £29k, and realistically I don't think there is any chance of paying it off in her lifetime. Thank you.

tifo

Thanks for your reply StepChange_Sylwia.

This is the only debt (mortgage) in the Breathing Space.

From your above post, I understand that a Breathing Space is active from when I received the email with BSS ref number ("When you get the email with the BSS reference number, this is to confirm the Breathing Space has been activated") and that the insolvency service don't decide to approve or not. It is done automatically from the debt advisor's application.

"You asked if your Breathing Space was active or not". I asked this as I understand that the debt advisor can cancel the Breathing Space upon a review but the question was whether the insolvency service would cancel it and is connected with 'do they activate it from the debt advisor's application or look into it to decide or not' which is the above question you answered. As the debt advisor hasn't cancelled it (my midway review is next week) and hasn't informed me that it is cancelled I assume it is active.

"You should also contact Shelter to ask if they have been contacted by the mortgage lender or their solicitor and to amend any errors on the application. When speaking to them, we would also recommend that you clarify (if you haven't already done this) that the debt in question is for an interest only mortgage where the term has ended already". The debt advisor hasn't contacted me about the Breathing Space after the application and I don't think the bank or their solicitors have contacted them. The debt advisor was informed that the Breathing Space is for an interest only mortgage where the term has ended and there are arrears, and that the bank is stating the whole amount is arrears.

"Please note that even if your Breathing Space was successful, it would only pause the eviction process". I'm aware that it's a temporary 60 day pause and within this time i intend to continue to correspond with the bank and their solicitors, as I have been doing for several months.

The bank said (last week) that they didn't know about the Breathing Space notification hasn't been sent to them. I and the bailiff (from his Court email address) then emailed it to them. The solicitors said the same even though their email address was given in the application. This is why I asked if the insolvency service decide to approve or not and then send any due notifications. From your answer I understand they don't and the Breathing Space is active when I receive the BSS ref number but there must be a good reason why the solicitors are saying they didn't receive it?

The bank then said (looking at my BSS ref number) that the mortgage debt is not in this. Thus they won't cancel the eviction and their locksmith and the bailiff came to the property last week. The bank then said that the notification for the Breathing Space must come from the insolvency service, the Court or the debt advice organisation (Shelter) and they won't accept my email, despite telling the bailiff that the 'customer' must email it to them when he did it himself.

A few days ago I received an email from the solicitors that the notification for the Breathing Space must come from the insolvency service, the Court or the debt advice organisation (Shelter) and they won't accept my email (or the bailiff's).

So, a few weeks into this I still don't know if the Breathing Space is active (your advice is that it will be from my receiving the notification, which I did) as I've not heard that it's not issued or cancelled and I don't understand why the mortgage debt would not be in it if it's active because that was the only debt added.

Back to the Breathing Space being defective, am I right in assuming that the bank would need to ask for a review if there is something wrong with an active Breathing Space and not just say they don't accept it? This means stopping all action and asking for a review, and if they don't agree with the outcome asking the Court to cancel the Breathing Space (there is an N244C and N244D form for this)? For the review or Court they would need to say that their debt cannot be included and should be taken out etc.

Thanks

tifo

I suffer from severe anxiety and depression and have been on medication for a number of years, including having 12 sessions of CBT last year with a further 12 sessions due.

At the repossession hearing the duty solicitor (Shelter) said I may be able to apply for a mental health crisis Breathing Space. This is something the debt advisor (Shelter) mentioned in telephone call for the Breathing Space but i discounted it saying "i'm not that bad yet". I said this because the information I read states that a mental health crisis Breathing Space needs an Approved Mental Health Professional (AMHP) to fill the form and the crisis must be something which requires detaining or hospital treatment. But i've also read (govt websites) that as long as someone is having mental health treatment such as CBT or other therapy they can apply for a mental health crisis Breathing Space. If so this is something I can look into because there is no limit to how many times this can be applied for, as opposed to the standard Breathing Space which is once every 12 months.

This matter is pushing me into a nervous breakdown as it's been 3 weeks and i'm wound up about it, running around speaking with and contacting many people in different places and from what i've seen online about a nervous breakdown (also called a mental health crisis) I may fit the criteria? I've informed the bank and their solicitors that i'm falling into a nervous breakdown as this is too much for me to handle for the time i've been doing it. They're previously aware of my mental health and physical conditions as this is why i'm with the bank's 'Customer Care' team for 'vulnerable' customers.

So I'm a bit confused. I could ask the mental health team who provided the CBT (and will be providing further sessions soon)?

"A "nervous breakdown" (or mental health crisis) is a period of extreme stress where an individual cannot function in daily life. While not a medical diagnosis, it indicates an overwhelming response to prolonged stress or an unmanaged condition like anxiety or depression". This is what google AI says (all google searches have an AI summary now) and is exactly how I feel. I have lack of appetite (I don't eat all day and have a snack in evening), lack of sleep (I go to bed at 1.00am and am up at 6.00am every day), have heart palpitations and a feeling of total helplessness and foreboding and dread and panic and am constantly fatigued, sometimes I doze off in the evening, and am sometimes disassociated from my surroundings. My hands are shaking all day and I feel the blood pumping. I've lost weight over the past months and people have commented on this. My normal clothes are all loose fit now, i've gone from size 36 to 34 and medium to small.

I'm also on medication for high blood pressure and i'm sure the current stress isn't helping.

Having checked on NHS 111 (online triage) it says "get help in the next few days" and points me to my GP and mental health crisis service 0800…(24 hrs) or call 111.

sourcrates

@Sakman21

Please read my private message to you.

StepChange_Aidan

https://forums.moneysavingexpert.com/discussion/comment/82057176#Comment_82057176

Hi,

Thank you for your message.

How do you mean that your mum inherited your father’s debt? Were these debts that she originally took out in her name on his behalf, or joint accounts? Please be aware that she shouldn’t be responsible to repay any debts that were in your father’s name only.

If she is liable, she shouldn’t be pressured into paying anything that she can’t afford to the creditors. If she can’t realistically repay the debts in a reasonable amount of time, she may be better off looking at options to write them off, but we would need more information to be able to give specific advice. In any case, her health and wellbeing should be prioritised over debt repayments.

If you’d like to go over your mum’s options with StepChange, you could send in a certified copy of the power of attorney document to us, alternatively she could complete a ‘letter of authority’ or call us to register and give permission for you to speak to us on her behalf. There's some more information on how she can do this here.

I hope this helps,

Aidan

StepChange_Aidan

https://forums.moneysavingexpert.com/discussion/comment/82057220#Comment_82057220

Hi,

After you apply for Breathing Space, the details you provided to the debt advisor are then transferred to the Insolvency Service. They verify the information and add your details to the Breathing Space register. The BSS ref is generated at this stage.

If a creditor raises an objection, the debt advisor would need to review their request and decide whether or not to cancel Breathing Space at the midway review stage. At StepChange we would contact you if there was an objection, but I can’t say if Shelter follow the same process. If you haven’t heard anything, I would recommend getting in touch with them directly to check for an update and to get further advice.

However, unfortunately, the capital balance of a mortgage after the interest only term ends isn’t considered to be the same as arrears and does not qualify for Breathing Space protections. The bank may still proceed with the eviction process without a review.

https://forums.moneysavingexpert.com/discussion/comment/82057253#Comment_82057253

To apply for Mental Health Breathing Space, you would need to be referred by an approved mental health professional, who can assess if you meet the criteria. However, as in the standard Breathing Space, only mortgage arrears can be covered, the outstanding balance isn't a qualifying debt.

I’m very sorry to hear how you’re feeling, and I understand that this situation must be very stressful for you. Please make sure you’re getting help from your doctor or seek further support if your health is being affected. We have a guide to dealing with debt-related stress here.

Regards,

Aidan

tifo

Hi StepChange_Aidan

"They verify the information and add your details to the Breathing Space register. The BSS ref is generated at this stage". I got the notification with the BSS ref soon after the debt advisor finished the application whilst I was still on the phone with her. Does this mean it was verified and added within this short period? The debt advisor hasn't contacted me about it since then and we have a 28 day review next week.

"If a creditor raises an objection, the debt advisor would need to review their request and decide whether or not to cancel Breathing Space at the midway review stage". The creditor hasn't raised an objection. They said they didn't know about it until I told their solicitors then them. It's because I had the solicitors email address for notification but not the creditor's. In the past the bank have always directed me to the solicitors for anything for the case, saying it's in 'litigation'. Since then they've said (1) their debt isn't in the Breathing Space (2) It can't be because it's end of term and (3) they didn't receive notification and they won't accept this from me or the court bailiff, after asking me and the bailiff to send details to them.

What I need to find out is if the Breathing Space was issued as per the BSS ref number and if the mortgage debt (capital + arrears) is in it. If not then comes back to what happens when an application is made and would the insolvency service issue a Breathing Space with no debt in it or would they issue a BSS ref number but not the Breathing Space.

From what I can see online (google search AI summary with links) a Breathing Space can be applied for again if, for some reason, the previous one didn't go through "If the application was rejected or didn't proceed: If your adviser decided the scheme wasn't appropriate or you didn't meet the initial criteria, you can reapply immediately as long as a moratorium (the actual 60-day pause) did not officially start". So, I need to check if it is active (the bank says No) as I have a notification with a BSS ref number that it is.

"To apply for Mental Health Breathing Space, you would need to be referred by an approved mental health professional, who can assess if you meet the criteria". I am looking into this and will contact the mental health team.