Where in the process | What a statutory moratorium does and does not do | Adviser tactics |
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Debt letters | A moratorium has no effect at this time. | Do not apply. |
Default notice | A moratorium has no effect at this time. | Do not apply. |
Writ, summons or claim | A moratorium has no effect at this time. | Do not apply. |
At court | A moratorium has no effect at this time. | Do not apply. |
Summary warrant granted | A moratorium does not stop a summary warrant from being granted. A summary warrant in pursuit of council tax arrears is followed by a charge for payment. | Do not apply at this stage; wait until the charge for payment has been served. |
Decree granted | A moratorium does not stop the decree being granted, but does stop the charge for payment being served. It also prevents a bank arrestment being executed (non-summary warrant) as there is no need for a charge for payment to be served for this process. | Apply at this stage (or wait until the decree has been extracted) to prevent a bank arrestment. Remember, for a bank arrestment (not under summary warrant), there is no need to serve a charge for payment so this would be the earliest time to apply. Only summary warrant debts need to serve a charge for payment before arresting a bank account. |
Decree extracted | The normal process is that once a decree has been awarded, there is a 14-day time limit to allow for appeals to be made. The creditor then has to ’extract’ the decree before executing diligence. | Apply at this stage to prevent a bank account arrestment. Remember only the local authority/HMRC needs to serve a charge for payment before executing a bank arrestment. If the debt is for council tax, wait until the charge for payment has been served and almost expired. |
Charge for payment served | Apply at this stage and it prevents a wage arrestment, attachment or exceptional attachment being served. It also prevents a creditor from applying for the client’s bankruptcy as an expired charge constitutes apparent insolvency. | Apply at this stage to prevent further diligence being carried out. |
Statutory demand served | When a statutory demand is served, it is an indication that the creditor is considering bankruptcy, as once expired it constitutes apparent insolvency. | Send the statutory demand back and deny the debt. This makes the creditor follow normal court and diligence procedures and takes it back to the writ/summons/claim stage. Or apply for a moratorium once the 21-day limit is almost up, which stops a creditor’s petition for bankruptcy. |
Bank account arrested | A moratorium does not lift the bank arrestment but freezes the money in the account. The bank cannot send it to the creditor. | Apply at this stage to freeze the money and then look at a DPP, PTD or bankruptcy and the client may get the money returned once in place. |
Earnings arrestment schedule served | A moratorium does not stop a wages arrestment that came into force before the moratorium period commenced. | No use in applying here, the client is too late if the arrestment has been executed. Try looking at a time to pay order, DAS or insolvency options. |
Attachment | A moratorium stops the attachment unless the goods have been removed for auction or notice of auction has been given. | Apply to freeze the process. Use a time to pay order (TTPO) or apply to have the attachment recalled. DAS and insolvency are also options. |
Exceptional attachment | A moratorium stops the exceptional attachment unless the goods have been removed for auction or notice of auction has been given. | Apply before the goods have been removed or the notice of auction has been given. Use a TTPO or apply to have the attachment recalled. DAS and insolvency are also options. |
Mortgage repossession proceedings | A decree for repossession is normally in two parts. One for payment of money (arrears) due and the other for repossession. A moratorium does not stop the repossession proceedings, but it can be used to stop the claim for money as with all other forms of diligence. | Apply for a moratorium to prevent diligence for the money part of the claim. In this case, a DAS may be the best option, include the arrears within the DPP. This is at the sheriff’s discretion. Ask the sheriff to continue the case to set up a DPP for the arrears. Take advice. |
Eviction proceedings | A decree for eviction is normally in two parts. One for payment of money (arrears) due and the other for eviction. A moratorium does not stop the eviction proceedings, but bankruptcy may be used to stop the claim for money as the debt will no longer be ’lawfully due’. | Apply for a moratorium to prevent diligence for the money part of the claim. In this case, a DAS or bankruptcy may be the best option as a bankruptcy including the arrears may stop the proceedings going ahead and a DAS can include the arrears. This is at the sheriff’s discretion. Note: the proceedings may include a ground for eviction due to other reasons. Take advice. |
Direct Earnings Attachment (DEA) | No effect. It does not stop or freeze the DEA. | Do not apply for bankruptcy. DAS or a PTD could work here. |
Deduction from Earnings Order (DEO) | No effect. It does not stop or freeze the DEO. | Do not apply for bankruptcy. DAS or a PTD could work for arrears only. |
Inhibition | No effect. It does not stop or freeze the inhibition. | Do not apply. |