HM Treasury has launched a new Breathing Space scheme to support hundreds of thousands of people struggling with debt problems.
Targeting roughly 700,000 people, the programme will offer debt advice and mental health crisis treatment without pressure from creditors or mounting debts.
The scheme will provide a 60-day grace period of legal protection from creditors with interest and penalty charges also frozen.
Those eligible will in turn receive professional debt advice to facilitate a plan to “get their finances back on track”.
John Glen, economic secretary to the Treasury, said: “We’re determined to tackle problem debt, but it is incredibly hard to get your finances back on track when your debts are piling up and you’ve got creditors at the door.
“This scheme will give people a breathing space from charges, distressing letters and bailiff visits, so they can tackle their problem debt with support from a professional debt advisor.”
He added: “And to help people going through a mental health crisis, which is too often linked to financial problems, we’re bringing in stronger protections lasting beyond the end of their crisis treatment.”
The Treasury said that it expects creditors to receive an extra £400m in extra debt repayments within the first year of the scheme, as supported debtors are able to meet more payments.