Statutory Moratorium
May not be suitable in all circumstances. Your credit rating may be affected.
Statutory Moratorium – Scotland
If you are finding it difficult to repay one or more of your creditors and feel like you need breathing space to consider your options without the threat of creditor action, you can apply for a Statutory Moratorium. This effectively stops creditor action against you for 6 months, offering you valuable time to seek advice and think about your longer term options.
The Statutory Moratorium is not a debt solution, it doesn’t write off debt and does not stop interest and charges from building up, but it does give you time to think and will stop imminent creditor action, such as an earnings arrestment or a bankruptcy petition. Any debt recovery actions already in existence, e.g. an earnings arrestment, will remain in place.
There are no fees to pay for applying for a Statutory Moratorium and the application process is very simple.
If the Statutory Moratorium application is successful, your creditor(s) will not be able to serve a charge for payment during the six-week period or enforce any court orders. You are allowed to apply for a moratorium once in any 12-month period so if you’ve already applied during the last year, you won’t be eligible.
Who qualifies for Moratorium protection?
In general you will be able to apply if you:
- You are a resident of Scotland.
- You are thinking about applying for a Trust Deed, DAS or Sequestration.
- Or, you need short term debt relief. Respite from creditor pressure.
- You’ll also need to confirm that this is the only Moratorium application you’ve made within the last 12 months.
- While not an essential qualifying requirement, you should also seek guidance from an experienced debt adviser.
Applying for a Statutory Moratorium
- You can apply directly yourself through the governing body, the Accountant in Bankruptcy (AiB) or Trust Deed Scotland® can help you with this.
- Once granted, Creditors (the people you owe money to) and Sheriff Officers (Bailiffs in Scotland) search the Statutory Moratorium Register before they take any enforcement action. Should you have a Moratorium in place, they cannot take any further action until the Moratorium expires.
Advantages of a Statutory Moratorium
- You get breathing space.
- Quick and easy application process.
- No setup fees.
- No minimum/maximum debt level.
- Can prevent creditor enforcement action.
Disadvantages of a Statutory Moratorium
- It is not a debt solution.
- You will not be able to apply for a second Moratorium for a further 12 months after your initial application.
- It will not stop your credit rating from being affected.
- Interest and charges are not frozen.
Formal Scottish Debt Solutions
If you are currently considering applying for a Statutory Moratorium in Scotland, or you are already protected by one but considering your long term options, you can get tailored debt advice from Trust Deed Scotland® and our experienced debt advice team.
The main formal Scottish debt solutions are as follows:
Frequently Asked Questions
Got a question? Maybe we have an answer for you here . . .
The Debt Respite Scheme, also referred to as Breathing Space, is a government scheme that helps to relieve some of the pressure and stress caused by being in debt for residents of England and Wales. In Scotland, we have an alternative, similar short term debt relief equivalent known as a Statutory Moratorium.
It is important to note that neither the Debt Respite Scheme nor a Statutory Moratorium is intended as a long term, formal debt solution. Similarly, neither can be considered to be a payment holiday.
There is also an additional Mental Health Crisis Breathing Space (MHCBS) debt respite scheme. The MHCBS is available to residents of England and Wales with at least one qualifying debt to a creditor and if they’re receiving mental health crisis treatment. This means that the individual is either:
- Detained under the Mental Health Act (this is also known as being sectioned)
- Removed to a place of safety under the Mental Health Act
- Receiving crisis care in hospital or the community from a specialist mental health team such as the crisis team or the home treatment team
Mental Health Breathing Space lasts as long as the individuals’ mental health crisis, plus 30 days and currently there is no equivalent contingency included with Scotland’s Statutory Moratorium equivalent.
Trust Deeds in Scotland are only available to residents who have lived in Scotland for at least six months before they apply. You would typically have at least £5,000 of unsecured debts to qualify.
This may include example unsecured debts such as credit card debts, bank overdrafts, and unsecured personal loans.
If you want to find out if you’d qualify for a Trust Deed or alternative Scottish debt solutions; use our Trust Deed Wizard® tool.
If you are based in England, Wales or Northern Ireland and have not lived in Scotland in the last 12 months, then other debt solutions exist such as an IVA or a Debt Relief Order which may be more suitable for you as those debt solutions are only available for residents of those countries.
Yes, we offer advice on all Scottish debt solutions and if a Trust Deed isn’t the right for you, there are other options in Scotland such as:
- Debt Arrangement Scheme (DAS)
- Sequestration (Scotland’s equivalent to bankruptcy)
- Minimal Asset Process (MAP route to Sequestration for those with no, or low income and assets)
Trust Deed Scotland® will undertake an assessment of your financial difficulties and provide you with tailored debt advice so that you can understand the options that are available for you.
In order for you to make an informed decision, it’s important that you receive balanced debt advice that gives you the key facts and how they may directly impact you.
There are pros and cons for all available solutions and while most formal debt solutions share common advantages and disadvantages, you should always seek advice from a suitably experienced debt adviser. Call us on 0141 221 0999.
Our data is based on 5,234 Protected Trust Deeds currently administered by Trust Deed Scotland® and granted between January 2017 and September 2021.
In this sample of PTDs, the expected write-off figure reaches as high as 83%. 5% of the PTDs have an expected write off figure between 71% and 83%. 95% of the PTDs have an expected write off figure of up to 70%, the average (mean) being 45% when the costs of administration are included.
Of the cases in this sample, 1,823 were granted since the Covid-19 pandemic took effect in 2020. The average expected debt write-off for these cases is slightly higher at 49%, when the costs of administration are included.
Your decision to apply for a Protected Trust Deed should not be taken purely on a proposed debt write off amount alone. It is very rare for a Trust Deed not to be protected with Trust Deed Scotland® and we have one of the best protection rates in our industry, for example, in 2021, we achieved a protection rate of 98.5%, this made us the best performing volume provider of Protected Trust Deeds in Scotland.
Trust Deed Scotland® provide tailored debt advice on all available debt solutions in Scotland.
We make sure that our clients get personalised debt advice based on their affordability, lifestyle and needs. May not be suitable for all. Will affect credit rating.
To find out what your options are, simply complete our online form or just call us on 0141 221 0999.
Further Information
We provide wide and varied advice to our customers. Below are some related categories.
