Period of moratorium
A moratorium ends six months from the day it was registered in the Register of Insolvencies or earlier if:1s198 B(S)A 2016 •an entry is made in the Register of Insolvencies recording the award of sequestration of the estate;
•an entry is made in the Register of Insolvencies recording that a trust deed granted by the person has been granted or refused protected status;
•an entry is made in the DAS register recording the approval of a Debt Payment Programme;
•written notice is made from the client or on their behalf withdrawing the moratorium.
Adviser tips
Using a statutory moratorium is all about timing. As a client can only access it once in any 12-month period, do not waste the chance.
It only covers the diligences listed in the legislation and does not work with DEAs and DEOs, other solutions can be found for these.
It gives you and your client time to work out a longer lasting debt solution suitable to their needs.
When you or the client have lodged a statutory moratorium, remember to inform the creditors who could serve a charge for payment or commence diligence – eg, a sheriff officer recovering council tax arrears as they have no statutory duty to check the Register of Insolvencies.
The situation with bank account arrestments can be confusing. Most creditors do not need to serve a charge for payment before arresting a bank account, only local authorities and HMRC need to complete this stage. Therefore, the earliest you should apply would be when the decree has been awarded and extracted if the debt is not for council tax.
When a bank arrestment has been served, a statutory moratorium stops the money being automatically released after 14 weeks, allowing you or the client time to challenge the arrestment in court or apply for a bankruptcy or protected trust deed.