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Mental health crisis moratoriums: one year on

Posted on 07/06/22 in NHAS

Mental health crisis moratoriums: one year on

Housing Matters talks to Darren Caisley, a mental health and money adviser at Rethink Mental Illness. Darren tells us about mental health crisis moratoriums under the Debt Respite Scheme and his role in the recent case of Lees v Kaye, where the High Court reinstated a leaseholder who was evicted during a moratorium.

Working for Rethink Mental Illness

Darren Caisley started off as a volunteer at Gateshead Citizens Advice 15 years ago before becoming a debt adviser. Working as a face-to-face adviser prepared Darren for his work at Rethink advising clients with mental health problems. 

I went to Rethink to work on this new project because I like dealing with clients with complicated cases. I think debt is a major contributor to mental health problems. Clients have got people knocking at their door, people threatening to evict them. I’ve been in a position where I had a small amount of rent arrears, only about sixty pounds, but it really worried me. Having had that experience helps me put myself in the clients’ position.  

Rethink is a mental health charity with a money advice project offering mental health crisis moratoriums to eligible clients. The nature of the problems Darren deals with can be different from his previous work, but the advice is often the same. 

The processes I follow and the debt advice solutions are exactly the same. I explain things in a different way and take longer to get the information across. I might end up doing more casework instead of expecting the client to self-help. I always try to get the client to do something for themselves, maybe find something out, because it can be empowering. I thought the work would be harder than it is, but it's okay because we have enough time to deal with complex cases.
One of my clients has schizophrenia. She said the police had told her not to pay her mortgage. I had to take that seriously and try and clarify what was going on, I couldn't just discount it because the client had mental health problems. I worked with the local authority to find her somewhere else to live. The client wasn’t evicted in the end, she was rehoused. We helped her to apply for bankruptcy to deal with her debt problems. Sometimes people with mental illnesses don’t know who they can trust. You have to work with a client for a long time and build a rapport, so they learn they can trust you.  
Quite a few people in mental health crisis moratoriums have assets, which is different from debt clients in a local advice agency. Some of our clients have large debts, their cases can be complicated and often have solicitors involved on the other side. We see quite a few guarantor debts where people have guaranteed business debts, they’ve agreed to be personally liable, so the debt qualifies for the moratorium. The amount of money involved means there’s a risk one of those cases could end up in court.  

Mental health crisis moratoriums

People who qualify can apply for a mental health crisis moratorium or a breathing space moratorium to stop debt enforcement action. A 'standard' breathing space moratorium lasts for 60 days and can only be accessed once a year. 

To qualify for a mental health crisis moratorium, a person in debt must be under crisis treatment. Once someone qualifies, the moratorium is not time-limited. It lasts as long as the treatment continues. That makes it an effective reprieve from enforcement action for eligible debtors.  

Rethink is the single provider of mental health crisis moratoriums, which gives Darren and his colleagues a unique perspective on how the Debt Respite Scheme works. 

The standard breathing space lasts 60 days. In my experience you can get that from most creditors anyway if you ask them. The mental health crisis moratorium is definitely more effective because it lasts longer.  
Nine times out of ten the client isn’t in a position to engage with debt advice, because they’re receiving mental health crisis treatment. They don't have to engage with advice under the mental health crisis moratorium, which is different from the standard breathing space. When we get the referral, we look through the client's debts and cross reference them with the credit reference file. Once we've done all the checks, we put the client's details into the Insolvency Service portal. The moratorium is usually effective from the following day, which is faster than the regulations say.
We often deal with clients who don’t qualify for the mental health crisis moratorium straight away. We try to help people who are waiting to be assessed by an AMHP to get seen more quickly. I put some people into the standard 60 day breathing space and contact social services. I’ve had success in speeding up the referral to social services, so the client can get in the mental health crisis moratorium when the standard moratorium ends. 

Mental health crisis moratoriums and breathing space moratoriums were introduced in May 2021. Some of the difficulties with the scheme are just coming to light. 

We have to be careful about people's current accounts. If someone has an overdraft, it's a qualifying debt for the moratorium. That's a worry, because the bank might freeze the account and the client wouldn't have access to their money, their benefits. People who get mental health crisis moratoriums haven't had debt advice before the moratorium starts, so you can't warn them about it. 

Sometimes we get incorrect information from the nominated point of contact. We have to end the moratorium when the crisis treatment ends, but sometimes the client moves from one type of secondary care to another. When someone looks at the records, it looks like the person has had a lot of different moratoriums, but really they qualified for a mental health crisis moratorium all along. 

Housing debts like rent and mortgage arrears are qualifying debts in a moratorium. Reports suggest private landlords have used the creditor objection process. This has affected Rethink clients. 

I’ve been surprised we haven’t seen more section 21 notices to be honest. Landlords can’t give notice on rent arrears grounds during the moratorium, but they can give a section 21 and get a possession order. I don’t know whether it’s because because they haven’t protected the deposit, or done a gas safety check or something like that.
We send out letters to private landlords who ignore the moratorium explaining what the rules are. We can report them to the Insolvency Service, but we don't know what happens after that. One client has a private landlord who is totally ignoring the moratorium protections. The landlord has sent someone round to try and change the locks. We're getting legal advice to challenge that. 

Most creditors we deal with are regulated by the Consumer Credit Act or the Financial Conduct Authority. If those creditors ignore the moratorium, you can help the client to complain to the Financial Ombudsman. With private landlords there's nothing like that. There should be consequences for creditors who ignore the moratorium and carry on trying to enforce a debt. 

Supporting a Rethink client in the High Court

Darren supported one of his clients through her recent High Court case, Lees v Kaye, where a leaseholder was evicted during a mental health crisis moratorium. Darren helped his client find legal advice to take the case to court, where she was reinstated in the property. 

The result has left housing lawyers in no doubt about the strength of the moratorium protections. Darren explains how he came to be involved, and how he found out the moratorium should have prevented eviction in the first place.

I was involved from the start, because I put the client in a mental health moratorium and handled her debt case. The client called me when the bailiffs were at the door, forcing the locks. I couldn’t believe it was going ahead, especially with High Court Enforcement Officers. They'd had advice from their barristers, who told them they could evict the occupier. The client was 300 miles away, otherwise I’d have tried to attend. In the end I couldn’t stop the client being evicted. I had to deal with the case on the basis that she was out of the property.  
I looked at the Shelter Legal website, and I found legislation and guidance about the Debt Respite Scheme. It all pointed to the same thing: you must get permission from a judge to enforce a debt in the moratorium. 
I got in touch with Shelter's Specialist Debt Advice Service after speaking to my team leader, explaining I thought the client had been evicted illegally. When I spoke to the specialists there I had to tell them exactly what had happened and the process we’d followed with the moratorium. The scheme is new to everyone, so they went through everything very carefully to check it against the regulations.  
The solicitor took over the eviction side of the case. They agreed from the start that the other side hadn’t followed the correct process because they didn't have permission from the judge. The solicitor said a judge might see it differently, but the judge saw it the same way as us. 
In the end when I read the judgment, it was really thorough and easy to follow.  
I’ve had an insight into the legal side, the Approved Mental Health Practitioner side, and the client’s point of view. It's been rewarding, and the experience means I’ll be better prepared for any other cases that come up.  
Rethink is there to help people who can’t access legal advice. We help people who get letters from solicitors that they don’t know what to do with or how to respond. Having this judgment is brilliant because it makes the law clearer for everyone.  

Darren spoke to Aadal Shafiq, a Specialist Debt Adviser, and Alexa Walker, a Senior Legal Editor, both at Shelter. 

Further reading and resources

Where to find more information about breathing space and mental health crisis moratoriums for professionals and their clients. 

Advisers dealing with debt cases for a client can contact Shelter's Specialist Debt Advice Service for expert advice or a second opinion. Phone 03300 580 404 or visit the SDAS webpage to submit an email enquiry or access the new webchat service. 

On Shelter Legal

Breathing space and possession proceedings covers when breathing space and mental health crisis moratoriums prevent landlords and mortgage lenders taking possession for arrears. 

In Housing Matters

Breathing space: arrears and evictions by Alexa Walker and Nicola McEwen explains how the Debt Respite Scheme can be used by anyone helping people in rent or mortgage arrears. 

Breathing space toolkit for more resources including details of debt advice providers. 

For the public

Housing Matters factsheet Breathing space: get time to deal with rent arrears.

Shelter Housing Advice page: Breathing space: a scheme to help with debts