Overview

The Families with Children and Young People in Debt (Respite) Bill aims to establish a scheme providing financial respite for families with children facing debt problems. The scheme will offer temporary protection from creditors, allowing families to create a manageable debt repayment plan with the assistance of a Debt Advice Provider.

Description

The bill creates the "Family Debt Respite Scheme" to help families with children struggling with debt. Eligibility will be determined by regulations set by the Secretary of State, considering factors like parental responsibility for children under 18, household income and debt, and prior Scheme engagement.

Applicants must apply through a Debt Advice Provider (DAP), who is a regulated entity or meets specific exemption criteria. The DAP assesses eligibility, determines whether the applicant's situation warrants Scheme entry and helps create a Debt Repayment Plan (DRP). The DRP outlines the debtor's relevant debts (excluding certain continuing liabilities like mortgages and rent) and a repayment schedule.

Scheme membership provides protections like a stay on bankruptcy proceedings and creditor legal action concerning those "relevant debts," preventing utility shutoffs and halting further charges. The Secretary of State can issue guidance to DAPs, and regulations will cover various aspects, such as dispute resolution processes for creditors' objections. A report on the scheme's effectiveness will be submitted to Parliament within 12 months of its launch.

Government Spending

The bill states that any expenditure incurred by a Minister of the Crown under this Act, and any increase in sums payable under other Acts due to this Act, will be funded by money provided by Parliament. No specific figures are provided in the bill itself.

Groups Affected

• Families with children and young people in debt: Could benefit from temporary debt relief and support in creating a repayment plan.
• Creditors and lenders: Will face restrictions on their ability to pursue debt recovery during a family's Scheme membership.
• Debt Advice Providers: Will be responsible for administering the scheme, assessing applications, and creating repayment plans.
• Public Authorities: Will likely have a role in ensuring access to advice and support services for eligible families.
• Domestic utility providers: Will be prohibited from disconnecting essential services for families enrolled in the Scheme.

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