The primary aim of the pre-consultation is to build on evidence already gathered and source further insight from the debt advice sector, creditors and individuals on the scale of problem debt locally.

The call for evidence is the first stage in an ongoing public engagement process. Legislation would be required to introduce a debt respite scheme.

The Financial Guidance and Claims Act 2018 transferred responsibility for policy, funding and the commissioning of debt advice services to Scotland, Wales and Northern Ireland from 1 January 2019.

Problem debt and the inability to keep up with regular bills and credit commitments is associated with a range of negative impacts on wider society, most notably poor mental health. 

An estimated 175,679 adults in Northern Ireland are likely to need debt advice in 2022. 

It is envisaged that any new scheme would incorporate provision for both a “breathing space” and statutory debt repayment plan.

The “breathing space” initiative hopes to provide headspace for debtors by temporarily pausing creditor enforcement action, interest and charges. The scheme also aims to help debtors access professional debt advice — and access it sooner — helping them reach sustainable debt solutions.

The pre-consultation, which can be accessed online, will run for six weeks from 14 December to 25 January 2023 with input sought from the debt advice sector, private and public sector creditors, voluntary sector and members of the public who wish to contribute.