New Guidance for Arrears (Debt Respite Scheme)

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  • New Guidance for Arrears (Debt Respite Scheme)

The government have decided to add another layer of problems for landlords in respect of a new scheme to help debt. Unfortunately, they have now included within the scheme rent arrears. The scheme won’t come into force until the 4th May 2021 but after that date it will make a huge number of problems when it comes to chasing arrears.

The scheme is to give respite where they have got a problem with their debt. There are two types of breathing space, the standard breathing space and a mental crisis breathing space. There will be a difference between the two. But landlords will need to consider both sides.

A stand breathing space.

This is available to anyone with a debt problem. It gives them legal protection for creditors actions for up to 60 days. This protection includes pausing most enforcement action and contact from creditors and freezing interest and charges on their debt.

A mental health crisis breathing space.

This is only available to someone who is receiving mental health crisis treatment and it has stronger protection. It lasts if the persons mental health crisis treatment plus 30 days. This includes no matter how long it lasts. The legalisation is supposed to be for guidance only but of course, it will create problems.

What does it mean for your responsibility?

It will mean that if you are owed a debt that is in breathing space you must stop all action relating to that debt and apply the protection. These protections must stay in place until the breathing space ends.

The electronics service whilst sending you notifications about each debt owed to you in a breathing space they will also inform of when the process started. You would need to make sure you applied for protections of these debts from the dates set out in notifications.

If you are a creditor it is also possible your debt might be added to a breathing space later.

Will there be debt advice provided?

A breathing space can only be started by a debt advice provided who is authorised by the financial conduct authority commonly known as FCA to offer debt counselling or a local authority.

Debt advice providers are responsible for administration of a breathing space. There are points of contact for the debtors. There will also be a point of contact for the creditors and the insolvency service.

What is the insolvency service?

This is when a person is thinking of becoming insolvent ie their debts are so much more than what they have that they decide to pass it over to a third party. They will maintain a private register of details of people who are in debts in breathing space and that the date of a breathing space was cancelled in 15 months.

What will start a breathing space?

Debtors can only access a breathing space when seeking debt advice from a debt advisor. Anyone who cannot or is unlikely to repay their debts can apply to a debt advisor for a standard breathing space. Although all applications must be considered, the debt advisor might decide a breathing space is not appropriate for the debtor. This would be for example where the person could pay their debts with some form of budgeting help or they already have assets that could easily be sold to clear the debt. Therefore, a breathing space would not be the right solution. A breathing space might also not be appropriate for someone who can enter a more suitable debt solution straight away without needing protection.

When will a mental health crisis breathing space be applied? How do they apply for it?

The government have committed themselves to the alternative route to access protection for people receiving mental health crisis treatment. If and approved mental health professional certified that a person receiving mental health crisis treatment, then this evidence can be used by a debt advisor to start a medical health crisis breathing space.

In additional to the debtor, the following people can apply for a debt advisor on behalf of a debtor for a mental health breathing space;

  • Any debtor receiving mental crisis treatment.
  • The debtor’s carer.
  • Approved mental health professionals.
  • Care co-ordinators appointed for the debtor.
  • Mental health nurses.
  • Social workers.
  • Independent mental health adequate or mental compacity adequate supportive of the debtor.
  • A debtor’s representative.

What is a debtor’s eligibility for a standard breathing space?

Even before a debtor advisor can start breathing space, they must confirm their client is eligible and meet all the conditions.

The conditions are;

  • Be an individual.
  • Owe a qualifying debt to a creditor.
  • Live or usually reside in England or Wales.
  • Not have a debt relief order or an individual voluntary arrangement
  • Undischarged bankrupt.
  • Not already have a breathing space or have started a breathing space in the last 12 months.

The debt advisor must also be satisfied that their clients meets needs of both of the following conditions.

The client cannot, or is unlikely to be able to, repay all or some of their debt.

A breathing space is appropriate for their client.

What is the eligibility for a mental health crisis breathing space?

The debtor must still meet the same criteria and conditions for a standard breathing space but they must also be receiving some form of mental health crisis treatment.

What information will the debt advisor need to start this?

They will need as follows;

  • Full name.
  • Date of birth.
  • Residential address.
  • Details of the debts they owe.
  • Name and a contact of the creditors.

If the debtor is a sole trader and has business debts, they must also include their trading name and any business address.

What are the qualifying debts?

This is the most important information for landlords. It is surprising that the government have included rent arrears. But they have.

They include as follows;

  • Credit cards.
  • Store cards.
  • Personal loans.
  • Pay day loans.
  • Utility bill arrears.
  • Mortgage or rent arrears.

Joint debts can also be included in breathing space, but it may not deal with both.

Guarantor loans can be included in breathing space, but the protections do not extend to a guarantor. The guarantor can only apply for their own breathing space if they are eligible. Therefore, it is important as we have discussed before that you have a guarantor for your tenants. If you have a guarantor then you are entitled to tackle the guarantor for the debt that has incurred.

What action do I need to take when I have received a notification?

When you receive a notification, you must search your own records to identify the debt that is owed by the debtor. Obviously, if it is only a property it will be quite simple.

You must make sure that you stop doing the following;

  • The debtor having to pay interest fees, penalties, and charges for that debt/arrears during breathing space.
  • Any enforcement or recovery action to recover that debtor by you or any agent you have appointed.
  • Contacting the debtor to request for payment of that debt unless you have got permission from the court.

Whilst interest can still be charged on the principle of the secured debt but not always on the arrears. You will therefore note that anything above could cause you a problem. Therefore, taking guarantors is so important.

What happens when debts are identified after a breathing space starts?

When you receive a notification, you must search your records of details of the debt you have been notified about. You must also search for the additional debts owed by the debtor.

If you find an additional debt or it is not clear what the debt notification is about you must tell the debt advisor about it as soon as possible.

The additional debt does not always become part of the breathing space, but it can do so.

What happens about stopping enforcement actions?

This may not stop enforcement in relation to a possession order. However, as this is so new nobody yet knows.

At this moment in time these are the items that the enforcement action would stop.

  • Collect or enforcing a breathing space debt including this done by any agent you have appointed.
  • Try to enforce a judgement without the court’s permission.
  • Enforce your security over breathing space debt.
  • Obtain a warrant or a writ.
  • Get or seek a liability order.
  • Sell or take control of the debtors’ properties or goods by way of a bailiff.
  • Start any action or legal proceedings against the debtor.
  • Make an application or default judgement for a claim of money against the debtor.
  • Take steps to install a pre-payment meter.
  • Take steps to disconnect a debtor’s premises on supply of gas or electricity.
  • Serve a notice to take possession of property to the debtor on the grounds of rent arrears due up to the start of breathing space or take possession of a property let to debtor having served such a notice to start of breathing space.

This section above is the most problematical. At this moment in time there is nothing within the outline by the government of exactly how to therefore enforce a possession order. This is going to be a major problem for landlords. If you are about to serve a notice to take possession of a property on the grounds of rent arrears and they then start a breathing space, you may be stopped.

Considering the law that is recently due to come in the renter’s reform bill, this is going to cause landlords no ends of problems. You can read our latest article on this here.

Unfortunately, the government has not yet outlined exactly how to resolve this. You are no doubt aware that the government have required landlords now to give a minimum of 6 months’ notice for tenants, but they have also changed so that they do not allow possessions up to mid-February. Is this going to be extended if the lockdown goes on further, we suspect it is.

We are seeking urgent clarification of the reform from our solicitors, but it is something we thought landlords should know about straight away.

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Cat Westmacott
Cat Westmacott
17:57 10 Jun 24
Generally helpful for Lettings. As with any company, sometimes need a push for a response, but often easier to speak on the phone than email. Feeling hopeful for the next year’s contract with Harringtons🤞.
Kirsty Turner
Kirsty Turner
20:50 04 Jun 24
Great experience. Everyone is so lovely and helpful over the phone at Harringtons! The best experience we have had with a letting agent in Brighton, none of the other agents in Brighton have been bothered to keep in touch and help us find a property as much as these guys. A special shoutout to the lovely lady who showed me around the flat (Georgie I believe -sorry if I got that wrong), great at answering all my questions and been very lucky in securing the first property we viewed with her (an amazing spacious flat that has everything we need - including nice storage space for our paddleboards!) Looking forward to moving into our seaside home. Thank you!
Shadan B
Shadan B
23:31 30 May 24
Great experience, very helpful staff and friendly. I wish you all the success. Thanks for your care. 💐😊
Rachel Roberts
Rachel Roberts
21:13 30 May 24
Best experience I've had with a letting agent!
Charley Besant
Charley Besant
10:25 30 May 24
So far the process with Harringtons has been amazing. We viewed 3 properties with Georgie and each time she was so informative and kind, she gave us the time we needed in each property to look around, take videos and ask questions about everything. The whole process has been easy so far and I can now happily say we found our property thanks to Georgie and the team at Harringtons.
Ainhoa Negro
Ainhoa Negro
09:15 30 May 24
Georgie at Harringtons Lettings in Brighton has been exceptional throughout my rental process. From the very beginning, her professionalism and friendliness stood out. She provided clear and prompt communication, ensuring all my questions were answered thoroughly. Georgie made the entire experience seamless, from viewing properties to finalizing the paperwork. Her attention to detail and genuine care for my needs made me feel confident and supported. I highly recommend Georgie and Harringtons Lettings to anyone looking for a top-notch rental experience in Brighton.
PRBL1
PRBL1
09:11 30 May 24
Joel Starcross
Joel Starcross
15:22 29 May 24
Beth has been an excellent agent, great communicator and enthusiastic member of the team. Highly recommended!
Jess Pond
Jess Pond
13:16 29 May 24
Had an absolutely awful experience with this company. Told me one thing on the phone and then told me another thing on email. Very mixed messages. Left 7 students homeless by putting the house back on the market with only 24 hour notice. Will never use them again. AVOID!
Roisin Lilley
Roisin Lilley
11:42 24 May 24
I recently had some problems with my previous agent and came to Beth for help! She took over the correspondence for me and sorted everything out for me! I can’t thank her enough for her patience and help!! I’d highly recommend her to other landlords that need help!
Chris Lilley
Chris Lilley
11:26 24 May 24
I’ve been a tenant with Harringtons Lettings for a while, they are great, they always sort out any issues I have quickly and efficiently, Beth in particular is really helpful and I’ll be going to her for my next rental property when I look to move in September!
Georgina Palzeaird
Georgina Palzeaird
11:21 24 May 24
Beth Roberts was a huge help when I needed to switch to a new letting agency. She was friendly and efficient and I’ve always felt I’m in safe hands.
Eliya Halim
Eliya Halim
10:26 24 May 24
Top service
Maryana Atiya
Maryana Atiya
10:20 24 May 24
Rees Harper
Rees Harper
17:53 21 May 24
Lauryn Keller
Lauryn Keller
15:20 03 May 24
Georgie was great on our viewing - super lovely, informative and honest. Thank you!
Sammi Richmond
Sammi Richmond
09:16 24 Apr 24
Well, they just contacted me via email asking for a review for money... so here, I guess.Does 3 stars get me that tenner? Probably not. Nothing terrible to say, but never had any issues with the property really. Don't enjoy that they were willing to pay for reviews though, seems sketchy.UPDATE: As the business has finally replied to my review 6 years later, I thought I would mention that I indeed have the email still as proof. Offer of £10 for a review, and to mention Rachel Erridge in the review. Also a prize of £200 to one lucky winner. The email was sent from the Harrington's admin email address. I can email the proof to whoever requests it.
Jayden Charles-Frempong
Jayden Charles-Frempong
01:20 18 Apr 24
Every interaction I've had so far with Harrington has been positive with workers responding to calls very quickly and addressing any queries efficiently.
severin severinov
severin severinov
10:05 11 Apr 24
It is very good that they do their job professionally and take care of the customers.
kate quick
kate quick
13:15 09 Apr 24
I am very happy and extremely grateful to have found Harringtons lettings and the beautiful flat that I am now living in. Not only is the flat perfect for me, ticks all the boxes and is in a great location; the whole communication/admin process was so fast and efficient. I spoke to many of the team, but the two main contacts initially were Georgie and Beth. Great personalities, friendly and fast at replying to emails and phone calls. It was all turned around very quickly and everyone at Harringtons seems to appear to really be happy in their jobs. Great letting agent and I would recommend them to others looking for a new home.
Michael Hollamby
Michael Hollamby
12:32 09 Apr 24
Having worked with many many lettings it has been refreshing to deal with such a dynamic and energetic team. From start to finish the team have outstanding. Special mention to Beth who has been fantastic. I can thoroughly recommend using Harringtons.
Celyn James
Celyn James
17:08 27 Mar 24
Great experience, Georgie was so knowledgeable and kind with any enquiries I had. Really put me at ease while house hunting, amazing service thank you so much!!
Madison Harris
Madison Harris
14:29 27 Mar 24
Georgie was so helpful and really kind very appreciative x
Amber-Rose Cook
Amber-Rose Cook
08:58 22 Mar 24
easy to use and navigate as a first time user
Buffy Vaughn
Buffy Vaughn
18:06 21 Mar 24
Harringtons have been so helpful so far. Everyone we’ve spoken to on the phone including Georgie have been so warm and receptive and easy to communicate with. As a couple renting together for first time me & Danny couldn’t have found better people to help us out, they’re clear and concise. We discovered them through Rightmove and would highly recommend anyone to use their services to rent with.Thanks guys!Buffy & Danny
Sajan Raja
Sajan Raja
01:48 21 Mar 24
Kerryn Johnson
Kerryn Johnson
16:58 18 Mar 24
Georgie was absolutely amazing! Very helpful, easy to talk to and all in all an absolute sweetheart. Made the process of renting and finding a property less stressful. Always happy to help and lovely to chat to!Thank you again for everything!
Julia Reinstein
Julia Reinstein
11:22 18 Mar 24
5/5 - Everyone I’ve spoken to on the phone has been so friendly and patient with our move in documents. We found Harringtons through Rightmove, and have been really happy with our interactions. The team respond to queries efficiently and are happy to answer any and all questions.
Andrew Brown
Andrew Brown
07:09 15 Mar 24
A really excellent agency, who are very easy and friendly to deal with. Highly recommended.
Rob Rainbird
Rob Rainbird
18:04 13 Mar 24
Lovely staff and all round positive experience - Georgie is an absolute diamond and a credit to the team!
Tori Tor
Tori Tor
11:15 08 Mar 24
Harringtons have been really helpful and very swift with their responses. Georgie was very proffesional and really friendly when she did the viewings with me and Beth on the phone was again really helpful and gave me hope when I was explaining my eagerness to find somewhere new to live. Thanks Harringtons!
christos papanicolaou
christos papanicolaou
09:33 07 Mar 24
Staff were brilliant. Very helpful
Yasmin Bright
Yasmin Bright
20:54 01 Mar 24
I'm in a difficult situation at the moment with my landlord wanting to sell the flat that myself and my 3 children have been living in for 7 years. I came across Harringtons Viewings by applying to view some properties outside of my area.Unfortunately I haven't been able to sort anything with Harringtons, however I wanted to write this to say that they have been nothing but kind, warm and very understanding of my situation. I've been really impressed by their customer service (namely Georgie & Beth) and hope that they are able to find me something eventually!Thanks so much.Yasmin
Tegan
Tegan
17:30 22 Feb 24
Have been very accommodating and helpful when calling agents. They have been very helpful in being able to secure a house for students.
TheFlyingCrocodile
TheFlyingCrocodile
16:42 21 Feb 24
Went above and beyond to get things sorted for me
Brittany Stace
Brittany Stace
11:18 24 Jan 24
Harringtons have been incredibly helpful and supportive of us as new renters and they have been super efficient in getting all of the documents sent through and signed in such a short period of time. Thank you!
Georgie Prebble
Georgie Prebble
20:36 05 Jan 24
Jade Innes
Jade Innes
10:24 04 Jan 24
So far the service has been good. The staff are very friendly and quick to respond to any questions and requests.
Polly Smith
Polly Smith
11:17 28 Dec 23
we chose this letting agents as they chose a good bills company that is much cheaper than other agents. When viewing houses the staff were very friendly and have been very helpful in answering our questions and making the process as easy as possible.
Emma Howe
Emma Howe
16:06 14 Nov 23
I would rate Harringtons Lettings a 5/5. Very lovely on the phone and very quick and easy to communicate with via email. Any problems have been resolved in no time at all. So far so good!I found Harringtons via Rightmove.
Akwisitions Feedback
Akwisitions Feedback
16:25 30 Oct 23
Very responsive and super helpful throughout the process. Highly recommended!
Chloe Ballard
Chloe Ballard
17:28 02 Oct 23
Although I have only been renting with Harringtons for a short period of time, I have had nothing but a positive experience. From viewing to admin updates. The admin team especially are very polite and quick to respond and I have no doubt that the rest of my tenancy will run smoothly. I would recommend to anyone considering renting in brighton.
Matthew Ball
Matthew Ball
11:46 19 Sep 23
Professional communication with tenant although entirely impersonal. There was a bigger disconnect in their communication with the landlord in most cases, which seemed to be either slow or non-existent (discovered after contacting the landlord directly).Property was full of spider webs on day 1 despite apparently being professionally cleaned. Took a day off of work to clean it on move out day, leaving it cleaner than when it received but still had to pay part of the deposit for professional cleaning.It has been a while since I have rented, but I'll avoid letting agencies completely now if this is anything close to the average renting experience.
Ronan SK
Ronan SK
12:38 12 Sep 23
Great professionalism/communciation from the start up until the end of my tenancy. Definitely set the standards for what agencies should be like. Highly recommend to those within Brighton.
Daniel Sutton
Daniel Sutton
10:29 24 Aug 23
I have rented with Harringtons Lettings before and have always found the agents to be quick, efficient, friendly and helpful. I loved their service so much I have chosen to rent with Harringtons again. Faultless 😊
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