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Borrowers to get 30 days' breathing space
Debt collectors have agreed to give struggling consumers 30-days' breathing space to put their finances in order.
The deal has been made between the government and the Credit Service Association (CSA), which represents debt collection companies.
It will ensure that debtors struggling with repayments will not be pursued by debt collectors until 30 days after their case has been referred to an accredited debt advisor, such as the Citizens Advice Bureau.
Consumer minister Gareth Thomas said: "This new 30-day rule will give people a breathing space to help them take control of their finances as well as encourage them to seek help from debt advisors."
The announcement comes on the same day as the launch of new debt relief orders, which will allow people with low incomes and limited debts to write them off and start again after 12 months.
More than 20 million debt cases are referred to the CSA each year, representing around £15 billion in value.