PEOPLE in debt should be given 28 days ‘breathing space’ to address their finances, free from action by creditors, according to a leading expert.

Allan Kelly, North-East regional chairman of R3, the trade body for insolvency professionals, said the aim was to avoid a hasty or panicked decision or worse ignoring the problem altogether.

The Government has been reviewing the legal framework for debt administration and has been asked to consider the proposal of a period of breathing space.

In return for individuals seeking advice to create a plan for dealing with their debts, no creditor action would be possible and repayments, interest and charges would be frozen.

‘Breathing space’ provisions already exist in other countries such as Scotland, Australia and Canada.

According to recent research by R3, debt levels remain a concern for almost half (47 per cent) of the North-East’s population.

Mr Kelly said: “Breathing space is not a tool for avoiding repaying debts, but would help people get the right advice and enter a suitable debt solution.

“It should be seen as a last resort for those who have already received numerous notices of debt collection and enforcement, and would provide providing a final opportunity to tackle financial difficulties.”

The results of the Government review are expected to be published before the end of the year.