Government aims to lay SDRP regulations by end of 2022

The government has published a consultation on the statutory debt repayment plan (SDRP), the second part of its debt respite scheme, and says it aims to lay the regulations by the end of 2022¹. The consultation document, published in May 2022, sets out detailed proposals for eligibility, protections and the lifecycle of a plan¹.

The SDRP will be a new form of statutory debt solution, allowing most of an individual's debts to be combined into a single plan and repaid over a manageable period, with legal protections from creditor action similar to those in breathing space¹. The first part of the scheme, breathing space, was implemented in May 2021¹. The regulations will apply in England and Wales, and SDRPs will be available to people who live in England and Wales¹. Scotland already has its own debt respite scheme, the Debt Arrangement Scheme, and Northern Ireland is considering its approach to a devolved scheme¹.

On timing, the document states:

It adds that the implementation period, the time between the regulations being laid and the scheme starting, will be at least 18 months, and that the government is seeking views on how long it should be¹. The exact start date will be specified in the regulations¹.

Key proposals in the consultation include:

The consultation also proposes that debts in relation to an agreement with an internet service provider or mobile phone network be classified as priority debts¹. It proposes that contributions due under an Income Payments Arrangement or Income Payments Order should be non-eligible debt¹. Discretionary non-eligible debts include housing debt, such as rent and mortgage arrears, and debts which have reached the legal time limit for creditor action¹. The plan would allow for future debts, known and quantifiable at application and falling due during the plan, and contingent debts, known but not quantifiable at application¹.

On protections, the document says the plan would prevent debts spiralling by stopping the accrual of all types of interest, as well as default fees and charges, and stop or pause recovery, collections and enforcement action against a debtor¹. Creditors must treat the amount they receive under a plan as full repayment of the debt, so completing all payments will fully extinguish all liabilities¹. The Insolvency Service will hold a register of people in an SDRP, which the government intends to be a private register, as with the breathing space register¹.

The document also notes a recent High Court case ruled that for the purpose of breathing space, a debt is a "liquidated sum that is due and owing" at the time of the application¹. It records that the provision of debt relief orders was extended in June 2021 to support more vulnerable people out of problem debt¹, and that on 14 February 2022 the Money and Pensions Service confirmed overall funding levels for commissioning debt advice services in England for the next three financial years¹.

Why it matters for households

The SDRP is aimed at debtors not suited to existing statutory solutions such as bankruptcy or debt relief orders, and for whom non-statutory debt management plans offer insufficiently broad protections¹. For people in England and Wales with problem debt, the scheme would combine most debts into one plan with protections from creditor action, a stop on interest, fees and charges, and the option of a one-month payment break in any 12-month period¹. Eligibility would depend on accessing FCA-regulated debt advice, or advice from a local authority exercising debt advice functions, and on the debt advice provider judging that a plan is appropriate¹. Debtors who have been subject to another plan within the most recent 12 months would not be eligible, with exceptions where a joint plan has been revoked because of the death of one debtor or because the other debtor no longer wishes to be in a plan, does not meet the eligibility criteria, or becomes subject to a debt relief order or bankruptcy order¹. The scheme will not start until at least 18 months after the regulations are laid, so no household can enter an SDRP before that point¹.

What happens next

The government will respond to the consultation later in 2022, detailing where policy has changed and the rationale for any changes¹. It aims to lay the regulations by the end of 2022, with the exact start date specified in the regulations¹. The implementation period will be at least 18 months, and the government is seeking stakeholder views on its length¹. The consultation also covers limited changes to breathing space, to improve the scheme based on the first year of its operation¹.