What is a moratorium?
A moratorium is a formal arrangement available in Scotland. It is similar to Breathing Space.
It is a legal requirement on the people you owe to follow, if you apply for:
Find out more about how we help people in Scotland.
A moratorium protects you from actions by the people you owe for six months.
You can put one in place at any time if:
- You live in Scotland
- You are applying for one of these solutions
- You are expecting court action while you are applying for one of these solutions
Find out how to apply on the Accountant in Bankruptcy (AiB) website.
You will get a moratorium if your debt relief order (DRO) is approved.
- This is available in England, Wales and Northern Ireland
- The moratorium will end when you are discharged
At the end, all the debts in your DRO will be written off.
What is creditor forbearance?
This is when you ask the people you owe to stop contacting you while you deal with your debts. It is an informal agreement.
Many will agree to stop contact for a short time if:
- You have had debt advice, or
- Plan to get debt advice
This can let you get help without the worry of calls from the people you owe asking for payment.
How do I ask the people I owe for time to deal with my debts?
1. Contact all the people you owe and tell them you have had advice from a debt advice organisation
You can do this by:
- Letter
- Email
- Over the phone
- In person
2. Show them proof that you are trying to sort out your debts
If you are getting debt advice from us:
- Tell them the date you spoke to us or
- Share the reference number we gave you
- Give them a copy of your budget
If you are dealing with your debts on your own, explain:
- What you have done and
- What you plan to do
3. You can make a complaint if they do not offer forbearance and you feel this is unfair
Why do creditors provide forbearance?
Most lenders want to help you deal with your debts. Helping you get debt advice benefits both you and them.
Most major UK lenders and debt collectors are covered by industry codes of practice that require them to offer forbearance.
These include:
Any members of these organisations should give you forbearance if you tell them you are getting debt advice.
Other codes of practice may include similar rules to offer forbearance.
How long does this type of forbearance last for?
Forbearance lasts for 30 days but can be extended if the people you owe think you need more time to deal with your debts.
The 30-day period is meant to give you time to work out:
- How to deal with your debts
- How much you can pay to your debts each month
- Whether a debt solution, like a debt management plan, would help you
They can give you an extra 30 days if you let them know you need more time.
Find out more about your rights when dealing with debt problems.