Insolvency moratorium: what the check means
What it means when a company has an active moratorium under the Insolvency Act, how it affects suppliers and creditors, and what to do while it lasts.
- Severity
- Critical
- Category
- Legal
- Plan
- Free and above
- Test code
- LEG-018
- Source
- Companies House insolvency records, The Gazette (London, Edinburgh and Belfast) · check it yourself
What this test checks
Looks for an open moratorium in the company's insolvency record. A moratorium, introduced by the Corporate Insolvency and Governance Act 2020, gives a company in financial difficulty a breathing space from its creditors while it tries to rescue the business.
It lasts an initial 20 business days and can be extended. While it is in force creditors cannot take legal action, enforce security or start winding the company up. The directors stay in charge, overseen by a licensed insolvency practitioner acting as monitor.
What a fail looks like
A moratorium is in force. The company has told the court or Companies House that it is, or is likely to become, unable to pay its debts, and is looking for a way out.
Harmless explanations
- A moratorium is a rescue tool, and some companies come through it into a restructuring or a CVA and keep trading.
What to do
- Expect to be paid for anything you supply during the moratorium: the company must pay for new supplies, and the monitor can end the moratorium if it cannot.
- Debts from before the moratorium are paused, not cancelled; keep a record of what you are owed.
- Watch for what follows: a CVA or restructuring plan, or administration or liquidation.
Background: What insolvency means for a supplier.
Related tests
- LEG-001Active Insolvency Proceedings
- LEG-024Administration Appointment
- LEG-021Insolvency Process Classification
Part of the test catalogue. Every check Senserity runs, with its severity and the plan it is available on.
Last reviewed .