A company in severe financial difficulty can apply for a moratorium. The moratorium will protect a company from Creditor legal action for 20 days. This gives the company some breathing room to think about their options without having to worry about receiving Court orders via their Creditors.

The application for a moratorium is made to the Court.

Your Insolvency Practitioner will advise on what you need for a successful application. Generally speaking, the Court will need to be convinced that the application is genuine and that your company has run into severe cash flow trouble.

No, you can apply for a 20 day moratorium without telling your Creditors. Should your application be successful, your Creditors will be legally bound to oblige to it i.e. they cannot instigate legal debt recovery proceedings against you for the duration of the moratorium.

Yes you can, moratoriums can be extended for another 20 days. Therefore you can apply for a total 40 days moratorium.

If you need a moratorium for longer than 40 days, you will need to seek consent from creditors.

Moratoriums can also be cut short.

You need to let Companies House know as soon as possible. Your Insolvency Practitioner will advise on how to do this.

Companies House need to be kept up-to-date on any changes to your company. This includes any extensions to a moratorium or if it is cut short.

A moratorium buys your business immunity from Court action for up to 20 days and even longer. This gives you a chance to sit down with your Insolvency Practitioner to think about and identify the next steps for your organisation. It gives you the opportunity to bring in new investment, outline a company restructure or business rescue plan so that you can get back on your feet.

Moratorium applications are free of charge.