Moratorium? (Scotland)

A moratorium is a six week period of debt relief during which creditors cannot take any action against a debtor for debts they owe them. If a debtor wants to think of applying for bankruptcy, a trust deed or Debt Arrangement Scheme (DAS) and require more time to consider matters, but are concerned about what creditors could do in the meantime, they can request a moratorium.

If a moratorium is granted, the Accountant in Bankruptcy (AiB) will register this on the Register of Insolvencies and the DAS Register. From this date, the debtor then has six weeks to decide if they want to proceed with an application. During this six week period, creditors cannot take any action against the debtor and all interest, fees and charges on the debts are frozen. The frozen interest, fees or charges will be added back onto the debt if the debtor decides not to proceed with an application. If the debtor is granted a trust deed or bankruptcy then any interest, fees or charges will either be settled or written off once completed. In a DAS these will be written off on completion of the Debt Payment Programme.

A debtor cannot be granted a moratorium if they have had another moratorium granted within the last 12 months, unless they have been in a joint Debt Payment Programme in a DAS which has been revoked.

The forgoing relates to the insolvency procedures in Scotand and not to the moratorium period in terms of a DRO in England and Wales. For more details on a DRO, see that section under insolvency.

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