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29 October, 2020 Open access

Money Advice Trust calls on government to commission full review of debt options in the wake of COVID-19

'Robust and effective' options are needed, that work in context of pandemic, says debt charity

The Money Advice Trust has called on the government to commission a full review of debt options and the insolvency regime within the context of the coronavirus (COVID-19) pandemic.

Highlighting that income shocks caused by the COVID-19 crisis are making bankruptcy and debt relief order (DRO) fees even harder to meet as well as making it more difficult for those already in solutions to keep up with their payments, the Money Advice Trust says that urgent action is needed to put in place robust and effective debt options that work within the context of the pandemic, and suggests a two-phase review to consider both short-term and long-term changes required to the personal insolvency regime and debt options more widely. 

In a new briefing, Debt options in the new normal, the debt charity explores the options that such a review might consider including - 

Commenting, director of external affairs at the Money Advice Trust Jane Tully said - 

'A full government review of debt options available to people in England and Wales is badly needed– and the impact of COVID-19 has made it even more important that we take a comprehensive, wide-angle view on what debt options are needed.  The framework we now have has evolved in a piecemeal fashion over several decades – and there is a risk that more and more people will fall through its gaps in the coming years.

This review should look both at the short-term changes required to help people in the immediate aftermath of COVID-19, and the long-term changes needed to reset and future-proof our debt options framework.  The Money Advice Service’s previous recommendations should also be taken into account.

In addition, as we move closer to the launch the new statutory Breathing Space scheme, greater clarity is needed on the timetable for the implementation of Statutory Debt Repayment Plans.  The Government should treat this as an urgent priority.'

For more information, see Charity calls for ‘full review of debt options’ in the wake of COVID-19 from moneyadvicetrust.org