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Individuals who need personal insolvency advice should have an entitlement to ‘breathing space’ from their creditors before enforcement action begins, according to R3.

The Association of Business Recovery Professionals says there should be a statutory 28-day window of opportunity to seek personal insolvency advice, during which time interest and fees would be frozen, and creditors would be forbidden from taking recovery action.

During that time, the individual would be required to seek advice on bankruptcy or its alternatives, or on how best to recover their financial situation without being declared insolvent, and without turning to loan sharks, payday loans and so on.

Phillip Sykes, president of R3, said: “People need time, without pressure from creditors, to seek professional advice on what the most appropriate course of action is.

“If someone can make a considered decision, that increases the chances of a better deal for the debtor and, often, a better deal for creditors.”

The system proposed by R3 would only be accessible once per year for debtors, and creditors could challenge it if they thought it was simply being used as a delaying tactic; a central register would inform all creditors if one of their debtors had entered into the 28-day Breathing Space period.