Debt Advice Handbook Scotland - 1st editionChapter 6: Statutory debt solutions in Scotland9. Statutory moratorium on diligence What is a statutory moratorium
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What is a statutory moratorium
A ‘statutory moratorium’ is a six-month period which prevents creditors taking any diligence action against a client.
If a client is thinking of applying for bankruptcy, a trust deed or the Debt Arrangement Scheme (DAS) and requires more time to think things over, but they (or you) are concerned about what their creditors could do in the meantime, an application for a statutory moratorium can be made.
What can a statutory moratorium do
A statutory moratorium can:1s197 B(S)A 1996
    •stop the service of a charge for payment;
    •stop a creditor’s application for bankruptcy;
    •stop the service of a wage arrestment;
    •stop the service of a bank arrestment and freeze the process of an ongoing bank arrestment;
    •stop or freeze an application for an attachment;
    •stop or freeze an application for an exceptional attachment.
Creditors can still follow the debt collection process, serving arrears and default notices etc as well as registering defaults on the client’s credit file. They can also apply charges and interest and contact the client.
 
1     s197 B(S)A 1996 »
What can a statutory moratorium cannot do
A statutory moratorium cannot:1s197 B(S)A 2016
    •stop an application to the courts for decree;
    •stop a decree being issued;
    •stop an earnings arrestment that is already in place;
    •stop a creditor’s petition for sequestration that has already been applied for;
    •stop a direct earnings attachment (DEA), deductions from earnings order (DEO) or other non-diligence procedures;
    •stop an inhibition from being applied;
    •stop a charge for removal being served or an eviction;
    •stop repossession in a hire purchase or similar agreement;
    •stop an energy provider installing a prepayment meter.
Creditors can still follow the debt collection process, serving arrears and default notices etc as well as registering defaults on the client’s credit file. They can also apply charges and interest and contact the client.
 
1     s197 B(S)A 2016 »