The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

Effect of a moratorium

7.—(1) A moratorium has the effect specified in this regulation in relation to moratorium debt during a moratorium period.

(2) Subject to paragraph (3), during a moratorium period a creditor may not, in relation to any moratorium debt, take any of the steps specified in paragraph (6) in respect of the debt unless—

(a) these Regulations specify otherwise, or

(b) the county court or any other court or tribunal where legal proceedings concerning the debt have been or could be issued or started has given permission for the creditor to take the step.

(3) A court or tribunal may not give permission for a creditor or agent to take any of the steps specified in paragraph (6)(a) or (b).

(4) Subject to paragraph (5), for the purposes of paragraph (2)(b), a court or tribunal may—

(a) determine an application for permission to take a step specified in paragraph (6)(c) or (d) in any way that it thinks fit,

(b) give permission subject to such conditions as it thinks fit, and

(c) make such orders as may be necessary to give effect to the determination of the application.

(5) A court or tribunal may only grant permission under paragraph 2(b) for a creditor or agent to take a step specified in paragraph (6)(c) or for a creditor to instruct an agent to take a step specified in paragraph (6)(c) where the court considers that—

(a) it is reasonable to allow the creditor or their agent to take the step, and

(b) the step will not—

(i) be detrimental to the debtor to whom the moratorium relates, or

(ii) significantly undermine the protections of the moratorium.

(6) The steps mentioned in paragraph (2) that a creditor is prevented from taking are any steps to—

(a) require a debtor to pay interest that accrues on a moratorium debt during a moratorium period,

(b) require a debtor to pay fees, penalties or charges in relation to a moratorium debt that accrue during a moratorium period,

(c) take any enforcement action in respect of a moratorium debt (whether the right to take such action arises under a contract, by virtue of an enactment or otherwise), or

(d) instruct an agent to take any of the actions mentioned in sub-paragraphs (a) to (c).

(7) A creditor or agent takes enforcement action if they take any of the following steps in relation to a moratorium debt—

(a) take a step to collect a moratorium debt from a debtor,

(b) take a step to enforce a judgment or order issued by a court or tribunal before or during a moratorium period regarding a moratorium debt,

(c) enforce security held in respect of a moratorium debt,

(d) obtain a warrant,

(e) subject to regulation 12(4)(d), sell or take control of a debtor’s property or goods,

(f) start any action or legal proceedings against a debtor relating to or as a consequence of non-payment of a moratorium debt,

(g) make an application for a default judgment in respect of a claim for money against the debtor,

(h) take steps to install a pre-payment meter under paragraph 7(3)(a) of Schedule 2B to the Gas Act 1986(1) or paragraph 2(1)(a) of Schedule 6 to the Electricity Act 1989(2) to take payments in respect of a moratorium debt, or use a pre-payment meter already installed to take such payments, unless a debtor had provided their consent for the installation of the pre-payment meter before the moratorium started,

(i) take steps to disconnect a debtor’s premises from a supply of gas under paragraph 7(3)(b) of Schedule 2B to the Gas Act 1986 or electricity under paragraph 2(1)(b) of Schedule 6 to the Electricity Act 1989 unless the debtor had taken the supply of gas or electricity illegally,

(j) serve a notice to take possession of a dwelling-house let to a debtor on grounds 8, 10 or 11 in Schedule 2 to the Housing Act 1988(3) or take possession of a dwelling-house let to a debtor having served such a notice,

(k) serve a notice to take possession of a dwelling let to a debtor or take possession of a dwelling let to a debtor having served such a notice—

(i) on the ground of breach of contract specified in section 157 of the Renting Homes (Wales) Act 2016(4) where that breach relates to rent arrears, or

(ii) on the grounds specified in section 181(2) of the Renting Homes (Wales) Act 2016(5), or

(iii) on the grounds specified in section 187(2) of the Renting Homes (Wales) Act 2016(6),

(l) contact a debtor for the purpose of enforcement of a moratorium debt,

(m) make an application in respect of a debtor for commitment to prison under regulation 16 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989(7) or regulation 47 of the Council Tax (Administration and Enforcement) Regulations 1992(8), or

(n) take any of the steps in this paragraph in relation to a joint debtor.

(8) For the purposes of paragraph (7)(f), legal proceedings against a debtor includes a bankruptcy petition.

(9) Where a moratorium debt is a secured debt, paragraph (6)(a) applies only to interest that accrues on any arrears on the debt during a moratorium period.

(10) After the end of a moratorium period, neither a creditor nor their agent is entitled to—

(a) require a debtor to pay interest, fees, penalties or charges referred to in paragraph (6)(a) and (b) that accrued during the moratorium period, or

(b) treat the non-payment during the moratorium period by the debtor of interest, fees, penalties or charges as a default by the debtor under, or a breach of, the agreement between the debtor and the creditor.

(11) Subject to paragraph (13)(c), to the extent it applies to a moratorium debt, during a moratorium period, the Secretary of State and the Commissioners for Revenue and Customs must not direct that a new arrangement should be put in place for a debtor’s benefit to be paid, wholly or in part, to a third party under regulation 35 of the Social Security (Claims and Payments) Regulations 1987(9).

(12) Any action taken contrary to this regulation shall be null and void.

(13) Nothing in this regulation affects the following to the extent that they relate to a debtor—

(a) a charging order made before the start of the moratorium under the Charging Orders Act 1979(10) or regulations 50 and 51 of the Council Tax (Administration and Enforcement) Regulations 1992,

(b) an attachment of earnings order made before the start of the moratorium under the Attachment of Earnings Act 1971(11) or regulation 37 of the Council Tax (Administration and Enforcement) Regulations 1992,

(c) a deduction from earnings made under—

(i) Parts 8 or 8A of the Social Security (Payments on account, Overpayments and Recovery) Regulations 1988(12),

(ii) Part 3 of the Social Security Administration Act 1992(13), or

(iii) Part 6 of the Social Security (Overpayments and Recovery) Regulations 2013(14),

where a deduction notice has been served before the start of the moratorium under that Act or those Regulations, or

(d) the debtor’s universal credit paid, wholly or in part, to a third party under regulation 60 of and Schedules 6 and 7 to the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013(15).

(14) In this regulation, “benefit” means any payment made to a debtor under the Social Security Contributions and Benefits Act 1992, the Jobseekers Act 1995(16), the Welfare Reform Act 2007(17) or the Welfare Reform Act 2012.

(15) This regulation is subject to regulation 11.

(1)

1986 c. 44. Schedule 2B was inserted by the Gas Act 1995 (c. 45), Schedule 2.

(2)

1989 c. 29.

(3)

1988 c. 50.

(4)

2016 anaw 1. Sections 157 is not yet in force.

(5)

2016 anaw 1. Section 181 is not yet in force.

(6)

2016 anaw 1. Section 187 is not yet in force.

(7)

S.I. 1989/1058. Regulation 16 was amended by S.I. 1992/474, regulation 3(2)(a), S.I. 1993/616, Schedule 2(2), paragraph 1, S.I. 1998/3089, regulation 5(1) and S.I. 2014/600, Schedule 1(1), paragraph 2(1)(d).

(8)

S.I. 1992/613. Regulation 47 was amended by S.I. 1994/505, regulation 6, S.I. 2014/600, Schedule (1), paragraph 3(e) and S.I. 2019/220, regulation 2(2).

(9)

S.I. 1987/1968.

(10)

1979 c. 53.

(11)

1971 c. 32.

(12)

S.I. 1988/664. Regulation 29A was inserted by S.I. 2013/384, article 31(9).

(13)

1992 c. 5. Section 75(1) was amended by the Social Security Administration (Fraud) Act 1997 (c. 47). Part 3 was amended by the Welfare Reform Act 2012 (c. 5) but some of those amendments are not yet in force.

(14)

S.I. 2013/384. Part 6 was amended by S.I. 2015/499.

(15)

S.I. 2013/380. Regulation 60 was amended by S.I. 2017/725, Schedule 5(1), paragraph 8(b) subject to transitional provisions in regulations 19, 19A and 20 of that instrument.

(16)

1995 c. 18.

(17)

2007 c. 5.