Hundreds of people in Barnet sought legal protection after struggling with problem debt, new figures show.

In May 2021, the Government launched its Debt Respite Scheme which saw people unable to pay debts become eligible for a “breathing space”, which means that creditors cannot pursue legal action against them while they sort their finances out.

There are two types of breathing space – a “standard” one, which gives legal protection from debt collection for up to 60 days, and one for those undergoing treatment for a mental health crisis.

The latter gives protection for the length of their treatment, and for 30 days after.

Data from the Government’s Insolvency Service shows 258 people were given a breathing space in Barnet between May 2021 and April this year.

This means 8.5 were started for every 10,000 people in the area.

Breathing spaces can only be granted by an organisation that gives advice and support on debt – such as StepChange, a debt charity responsible for two-thirds of all breathing spaces during the first 12 months of the scheme.

Sue Anderson, head of media at the charity, said while there were “lessons to learn” from the first year of the scheme, it had broadly been a success.

However, she warned that inflation is pushing more people into debt.

“The steep rise in the cost of living has increased the risk of falling into problem debt – more acutely for financially vulnerable households, with StepChange data showing that the cost of living is now the second most commonly cited reason for debt among new clients, up from the sixth most common in 2021,” she added.

Across England and Wales, nearly 64,000 breathing spaces were granted in the year to the end of April – including more than 1,000 for people undergoing a mental health crisis.

They included 6,787 across London.

The region had the fewest by population, with 9.8 per 10,000 people, while the North East had the highest, with 17.9.

Citizen’s Advice, which supports people on a variety of money issues, administered a further 15% of all breathing spaces.

It recommends people check whether their debts are covered by the scheme, and that they talk to one of its advisers to discuss their options.

A Treasury spokesperson said: “We are proud of the breathing space scheme which has supported over 63,000 people in problem debt – helping to get their finances back under control.

“We understand that people are struggling with rising prices which is why we have acted to protect the 8 million most vulnerable British families through at least £1,200 of direct payments this year, with additional support for pensioners and those claiming disability benefits.”

If you are suffering from problem debt and need support, visit www.stepchange.org or www.citizensadvice.org.uk.

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