• What is a Moratorium?


What is a Moratorium?

A debt moratorium is when you get official permission to stop paying your debts for a while as you fix your money problems. Creditor forbearance is when the people you owe money to let you take a short break from payments, which might also stop extra costs and interest.

Maxine McCreadie
Maxine McCreadie

1st October 2019


Are you thinking of applying for a debt solution such as a Trust Deed or Debt Arrangement Scheme (DAS), but need more time to mull it over and are worried about what your creditors are going to do? Then a moratorium might be the answer you need.

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How does a moratorium work?

A moratorium is a period of time, usually six weeks, that offers those in financial distress a little breathing space.

Creditors cannot take any recovery action against you in this time and is often considered to be a relief to those who need it.

If granted, it will be registered by the Accountant in Bankruptcy (AiB) on the Register of Insolvencies and the DAS Register.

You will then have six weeks to make your decision whether you want to apply for a debt solution or not.

It’s important to note, however, that it’s not possible to be granted a moratorium if you have already been granted on within the last year.

The only exception to this is if you have been in a joint debt payment programme within a DAS that has been revoked.

You also won’t be protected from creditors obtaining court orders – it only stops them from doing anything with the order for the moratorium period.

The benefits of a moratorium

The main benefits of a moratorium are:

  • It gives you breathing space to make an informed decision
  • Interest and charges are frozen
  • Creditors cannot take any action against you for the six-week period
  • It will continue to protect you if you enter into a debt solution such as a Trust Deed or Debt Arrangement Scheme

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How to apply for a moratorium?

You can find and submit the application for a moratorium on the Register of Insolvencies homepage. Depending on your situation you will submit either a Form 33 or Form 34.

If you are unable to do this, you can also email them to [email protected] or return them by post.

It is also suggested by the AiB that you read their privacy statement before submitting your application.

How long does it take to set up a moratorium?

The time it takes to set up a debt moratorium can vary based on individual circumstances and the responsiveness of your creditors.

It could be a matter of days or weeks. It’s important to start the process as soon as you realise you’re struggling with your debts and to seek help from a financial adviser or a debt charity.

Who can use a moratorium?

This process can be used by anyone who lives in Scotland as long as they haven’t had one granted in the last 12 months.

Anyone struggling with their finances can use a debt moratorium. It’s often used by those unable to make current debt payments due to unforeseen circumstances like job loss, illness, or other personal crises. However, eligibility may depend on specific conditions set by the lender or legal regulations.

When should a moratorium be used?

It’s important to only use this process when it’s necessary. You can apply for this yourself, but it’s always best to seek advice before you do.

The most common time to use it is after you have been served a Charge for Payment or a court order. This is because it’s when a debt reaches this stage that you become more at risk of the following:

How long does a moratorium last?

The length of a debt moratorium can vary. It’s typically agreed upon between the debtor and the creditor, and can range from a few months to a couple of years, depending on the individual’s circumstances and the lender’s policies. It’s crucial to get financial advice to understand the specific terms in your case.

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Is interest paid during moratorium period?

Interest and charges are frozen once your moratorium has been granted, meaning your balances won’t increase dramatically in this time.

However, if you then decide not to proceed with your application for debt help, then this will be added back on and you will likely end up with more debt than you started off with.

If you’re struggling with debt and are looking for some help, contact us today on 0800 043 1320.  Our friendly advisers are on hand to offer free and confidential advice to help you make the best decision for your situation.


Maxine McCreadie
Maxine McCreadie

Maxine is an experienced writer, specialising in personal insolvency. With a wealth of experience in the finance industry, she has written extensively on the subject of Individual Voluntary Arrangements, Protected Trust Deed's, and various other debt solutions.

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Our debt experts continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

October 1 2019

Written by
Maxine McCreadie

Edited by
Ben McCormack

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