Post-consultation draft SDRP regulations published

The Treasury has laid draft regulations before Parliament and Senedd Cymru setting out how a statutory debt repayment plan (SDRP) would operate in England and Wales¹. The draft Debt Respite Scheme (Statutory Debt Repayment Plan etc.) (England and Wales) Regulations 2022 were published in May 2022 and would come into force on a date given in the text only as "[**** 2024]"¹. The regulations extend to England and Wales and apply to debtors domiciled in England and Wales or ordinarily resident in England or Wales¹.

Under the draft, a debtor could apply to a debt advice provider for a plan, but only after first obtaining advice from a debt advice provider¹. A debt advice provider must not charge a debtor a fee in connection with a plan¹. To be eligible, the debtor must owe a qualifying debt, be domiciled or ordinarily resident in England and Wales, not be subject to a debt relief order, interim order or individual voluntary arrangement, not be an undischarged bankrupt, and not be subject to another plan¹. A debtor who has been subject to another plan revoked or completed within 12 months of the application date is also excluded¹. The debtor must be unable, or likely to be unable, to repay some or all of their qualifying debt as it falls due, but would be able to repay all of it within a period not exceeding 10 years¹. The draft sets a threshold for creditor objection expressed as "A/T x 100 = > 25%"¹. Debt advice providers must use the Standard Financial Statement when considering whether the conditions are met¹.

The draft defines mandatory non-eligible debt to include secured debt that does not amount to arrears, and non-eligible business debt¹. It also lists debts that cannot be included, among them council tax for a financial year except where all instalments have fallen due and any instalment is unpaid, and student loan sums¹. Priority debt is defined to include rent arrears on the debtor's sole or primary residence, arrears on a mortgage for that residence, debts owed to a local authority or the Crown, gas or electricity supply, hire-purchase agreements, and agreements with an internet service provider or mobile phone network¹.

The draft covers annual and in-year reviews, variation of a plan, payment breaks, revocation on mandatory and discretionary grounds, and completion¹. Payment distributors would be debt advice providers subject to the Financial Conduct Authority Client Asset Sourcebook and listed by the Secretary of State, or the Secretary of State when appointed to act as a payment distributor¹. The draft also amends the Breathing Space Regulations¹.

Why it matters for households

The scheme would sit alongside the existing Breathing Space moratorium, which the draft regulations amend¹. For households in England and Wales, the draft sets out who could enter a plan, which debts could be included and which could not, and a repayment period capped at 10 years¹. Rent and mortgage arrears on a sole or primary residence, council tax in some circumstances, utility and phone debts, and hire-purchase agreements are treated as priority debts under the draft¹. Secured debt that is not in arrears, business debt, student loans and most council tax are excluded from qualifying debt¹. Debt advice providers would be barred from charging a fee for a plan¹. The start date is not fixed in the published text, which gives the relevant date as "[**** 2024]"¹. Scotland operates a separate statutory debt solution, the Debt Arrangement Scheme, and readers comparing the two may find the guide to sequestration or DAS in Scotland relevant.

What happens next

The draft was laid for approval by resolution of each House of Parliament and of Senedd Cymru¹. The regulations would come into force on the relevant date, given in the draft as "[**** 2024]", with certain provisions tied to commencement of sections of the Renting Homes (Wales) Act 2016¹. No further timetable has been reported.