Photo: Jacob King/PA Wire

Hundreds of people in Rochdale sought protection from debt collectors last year, under a new scheme designed to give them respite to find a way out of their money troubles.

The Debt Respite Scheme was announced in 2019 after a five-year campaign by charities and came into effect in May 2021.

Its aim is to give people the time to access professional advice without the stress of spiraling debt.

Under so-called “breathing space regulations,” borrowers can request a 60-day break from any enforcement action and a freeze on interest, fees and penalties.

In Rochdale, 254 borrowers requested respite, a rate of 15 per 10,000 adults.

As debt can be linked to mental health issues, protections to breathe are also available for people in mental health crisis who also have money problems. It lasts as long as they receive crisis treatment and up to 30 days after.

Figures from the Insolvency Service show that in the first year of the scheme – from 4 May 2021 to 30 April 2022 – a total of 3,527 people in Greater Manchester entered respite – a rate of 16.0 per 10,000 adults.

In Rochdale, 254 borrowers have requested respite (Photo: Dominic Lipinski/PA Wire).

Tameside borrowers were the most likely to ask their creditors for a break, with a rate of 23.2 per 10,000 adults; while Trafford had the lowest rate of 12.0.

The figures show that most local authorities with high respite rates also had higher rates of individual insolvency.

In Rochdale there were 29.8 insolvencies per 10,000 adults, compared to 39.5 insolvencies per 10,000 adults in Tameside, the highest rate in Greater Manchester.

Most Breathing Spaces were registered with StepChange Debt Charity (65.5%) or Citizen’s Advice (15.1%).

Peter Tutton, Head of Policy at StepChange Debt Charity, said: “In its first year respite has been successful in delivering good outcomes for financially vulnerable people.

“Our statistics tell us that around 90% of clients who contacted StepChange and found relief received comprehensive debt advice, compared to around 25% of clients who did not.

“Customers who breathe space are also about two to three times more likely to opt for a debt solution.”

Mr Tutton said the charity’s findings showed customers had benefited from protections, but that “some parts of the scheme, such as the length of the protection period, could be developed to better suit a more wide range of needs”.