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COMPANY INSOLVENCY MORATORIUM: PROTECT YOUR BUSINESS

Gain relief from creditor pressure and explore recovery options with a company insolvency moratorium. At Inquesta, we specialise in helping businesses navigate financial distress with tailored insolvency solutions. A business moratorium offers immediate protection from creditor action, providing breathing room to restructure and recover.

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What Is Debt Moratorium?

A company moratorium is the temporary legal period under the insolvency moratorium framework. Its intention is to provide businesses with some much-needed protection from creditor actions for an initial period of 20 business days. This time under moratorium can be pivotal for businesses facing serious financial pressures, as it allows them to explore recovery strategies without the threat of legal proceedings, winding up, or having assets seized.

Initially introduced under the Corporate Insolvency and Governance Act 2020, it is intended to offer a legal lifeline for those businesses facing insolvency. During this time, your firm can continue trading, giving you the opportunity to develop a tailored rescue plan to avoid liquidation.

How To Know If Your Business Is Eligible For An Insolvency Moratorium

In order to qualify for a company moratorium, your business must meet a series of criteria:

Your company must not be able to pay its debts as they fall due.
An authorised and licensed insolvency practitioner must conclude that a moratorium has a good chance of rescuing the firm as a going concern.
Your business must not be an insurance firm, bank, or other form of financial institution.

Our team of experts will be able to quickly determine your insolvency moratorium eligibility as well as guide you through the entire process — ensuring that your firm gets the protection it needs.

What Is The Moratorium Period?

As standard, the initial moratorium period you can expect for your company will last for up to 20 business days. However, this can be extended for up to a year, with consent from creditors or approval from the court.

During this period of insolvency moratorium, all obligations to repay outstanding debts are suspended. This provides struggling companies with the time necessary to set plans in place to restructure and recover from financial distress and regain stability.

Moratorium vs Grace Period

A grace period is a temporary extension that’s granted to a business or individuals to fulfil an important obligation (making a payment, meeting a contractual deadline, etc.) without facing a penalty. Unlike business moratoriums, a grace period will usually be offered by creditors as a courtesy, and is considered much less formal than a moratorium. Grace periods typically only last for a short time and are intended to provide some leniency over a set time frame. While both tools do provide some relief, a company moratorium is more comprehensive, and legally enforced, whereas a grace period is primarily there to avoid penalties for late obligations when repayment is imminent.

Key Benefits of a Company Moratorium

A business moratorium offers several key advantages that provide critical support to firms facing financial pressure. These benefits not only offer immediate relief, but might also pave the way for long-term recovery and stability. Key benefits include:

Immediate Creditor Protection: Once under moratorium, creditors are legally prohibited from taking enforcement action. This provides immediate relief, so you can focus on turning things around without the constant pressure.
Continue Trading: A key advantage of a company moratorium is the ability to continue trading. During the moratorium period your firm can operate as normal while exploring recovery options.
Restructure Debt: With the protection of an insolvency moratorium, your business can negotiate with creditors to find ways of restructuring debt in order to reduce liabilities. During this time you may want to consider a Company Voluntary Arrangement to manage debts more effectively.
Safeguard Your Workforce: Company moratoriums also help safeguard jobs and retain staff during difficult financial times.

Download our FREE Guide to Liquidation

We appreciate that while a company moratorium will provide vital breathing room in which you can restructure your business and regain some financial stability, it’s essential that you’re prepared for any and all potential outcomes. If your situation cannot be recovered during a period under moratorium, company closure and liquidation may be the next step.

To help you navigate this complex process, we’ve created a comprehensive ‘Guide to Liquidation’. This FREE download details everything you need to know. Even if your current focus is on business recovery via an insolvency moratorium, it’s important that you have a solid understanding of liquidation should your restructuring efforts not come to fruition.

Download our FREE Liquidation Guide today and ensure you’re ready to act, no matter where your financial journey might lead.

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How We Help With Company Moratoriums

When facing serious financial challenges, navigating the many complexities that come with financial issues and insolvency can be daunting. Our dedicated Insolvency Practitioners are here to make your life easier by providing expert guidance and hands-on support throughout. With a deep understanding of insolvency law and business debt recovery options, we’re ideally positioned to help you leverage a company moratorium to stabilise your business, protect it from creditor actions, and ultimately create a clear pathway to recovery.

Here’s a rundown of our tailored approach to aid directors through the company insolvency moratorium process:

Initial Consultation & In-Depth Assessment

The company moratorium process, when dealing with a specialist, will always start with an initial consultation. Our consultations are 100% free with no-obligations necessary. The purpose of this initial meeting is to gain as thorough an understanding of your firm’s financial position as possible. Our team will assess your level of cash flow, outstanding liabilities, current creditors and the level of pressure being exerted, and your overall financial health.

This initial in-depth assessment helps us to determine whether a business insolvency moratorium is the right strategy for you, to protect your business. Ultimately, our goal is to provide clear, actionable advice on the best steps forwards, and to tailor them to your specific situation.

Preparing Your Application

Once we’ve determined that a company moratorium is the optimal solution for you, our experts will handle the preparation of your application from start to finish. This will include ensuring that your business meets all the necessary eligibility criteria, the collection of all required financial records, and drafting a detailed report. The purpose of this report is to highlight your viability — to indicate to relevant parties that a period under moratorium would actually have a realistic chance of helping the firm recover. The more meticulously prepared your application is, the more chance you have of being approved.

Moratorium Filed & Court Submission

Upon completion of the necessary documentation, our team will then manage the actual submission process with the courts on your behalf. Our aim is to expedite this as much as possible, ensuring that your business is able to gain the legal protection from creditor action afforded by being under moratorium. This prompt intervention allows for proper planning and forethought, to focus on business recovery efforts without the threat of winding-up petitions, asset seizure, or any other legal threats.

Rescue Strategy Developed

Once the application has been approved, your company will officially be classified as being ‘under moratorium’. This means that you will finally have some breathing room to regroup and recover. Our Insolvency Practitioners will be on hand to work closely with you in developing a bespoke business debt rescue plan.

A recovery plan can involve a number of possible solutions, including restructuring of debts, renegotiating with suppliers, streamlining operations, and looking at ways to better manage cash flow. With extensive experience in this field, our team are specialists when it comes to crafting a robust plan to address the unique challenges and needs of your business — which sets a clear path away from suffocating debt towards financial freedom.

Creditor Liaison & Negotiation

Just because a business moratorium has been agreed, and you are secure from pressure from outside parties, does not mean that you should be ignoring them. Effective communication with your creditors should be considered a vital component of an effective company insolvency moratorium.

Thanks to decades supporting struggling businesses, our team has experience working closely with creditors. We can act as your representatives to negotiate with them, with the aim of securing payment freezes, extending credit terms, and revising payment schedules wherever possible. This open line of communication can help to build trust between the two parties on either side of the moratorium.

Moratorium Period Extended (If Required)

It’s possible that your business will require more time than the initial 20 day period in order to finalise its recovery. Fortunately, it is possible to extend the company moratorium period. Our experts can prepare and submit the necessary applications to the court in order to maximise your chances of a successful extension.

For this to come to fruition, it needs to be demonstrated that an additional extension is in the best interests of keeping the doors open and the lights on — as well as maximising creditor repayment. You are able to extend your company insolvency moratorium by a period of up to another 20 days. Further extensions can be granted up to one year, although this will require further consent from outstanding creditors, or approval from the court.

Ensure Compliance & Monitor Progress

Throughout your business insolvency moratorium, it’s essential that you comply with all legal and financial obligations if you want to maintain protection from creditors. We will continuously monitor your adherence to the terms outlined in the initial moratorium. This includes timely report submission, financial updates to key stakeholders, and more.

Post-Moratorium Support & Long-Term Stability

Inquesta’s commitment to your business doesn’t simply end when your firm’s period under moratorium concludes. We’ll continue to support you however we can — whether it be implementing your debt recovery plan, tracking your progress, or making any adjustments to strategy that may be necessary.

So, whether your next steps involve transitioning to something like a Company Voluntary Arrangement, or going down the route of liquidation and company closure, our experts are here to provide valuable guidance aimed to help you achieve your long-term goals.

What Makes Inquesta the Perfect Moratorium Partners

With a wealth of experience handling insolvency moratoriums and a wide range of debt recovery strategies, we have established ourselves as a trusted partner for businesses facing financial challenges across the length and breadth of the UK.

Our team of insolvency practitioners is dedicated to guiding you through the process, leveraging our in-depth knowledge of UK insolvency to help you navigate complex financial issues with confidence. Whether you are facing pressure from creditors, struggling with cash flow, or exploring restructuring options, we offer the expertise you need to protect your firm’s best interests — setting you on the path to recovery.

We offer tailored insolvency solutions with bespoke advice designed to meet the unique needs of you and your business. From initial consultations to creditor negotiation and beyond, our transparent, no-hidden-cost approach is designed to ensure clarity and confidence throughout. Beyond just securing your business insolvency moratorium, we are here to help you achieve long-term financial stability.

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Meet the Director

At Inquesta we offer a director-led service. Our dedicated team is ideally positioned to support you through company insolvency moratoriums and beyond.

Steven Wiseglass

Director of Insolvency

A co-founder of Inquesta, Steven is a licensed Insolvency Practitioner with over a decade of experience in the field. He is a member of the Insolvency Practitioners Association, Association of Business Recovery Professionals (R3), and his insolvency licence is issued by the Insolvency Practitioners Association. In addition, he sits on the R3 committee of the North West Regional Committee.

Steven specialises in advising directors of small to medium-sized businesses, and has a wealth of expertise in providing the most appropriate advice whatever the firm’s circumstances may be. He has also been instrumental in helping company directors save their business and rebuild them into successful enterprises.

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