Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Moratorium definition

What does Moratorium mean? A moratorium is a legally imposed pause on creditor enforcement and legal proceedings, giving a debtor temporary protection while rescue, restructuring or insolvency options are pursued. It is usually created by statute, with scope and duration set by legislation and shaped by case law. In England and Wales, moratoria arise in several contexts, including the standalone company moratorium under Part A1 Insolvency Act 1986 (inserted by the Corporate Insolvency and Governance Act 2020), the statutory moratorium on entry into administration (Schedule B1), interim orders for individual voluntary arrangements, and the Debt Respite Scheme (Breathing Space) for individuals. During a moratorium,...

Trading in administration: the administrator’s perspective on strategy, funding, employees, assets and suppliers (Great Britain)

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Before accepting appointment as administrator, an insolvency practitioner (IP) will typically have carried out business reviews, prepared contingency plans, and advised the company and its directors on the choices available when facing financial difficulties. For more detail on the pre‑administration stage, see Practice Note: Restructuring-initial steps. If administration is identified as a workable route, the IP will determine the administration’s purpose and the strategy required to deliver it, as well as the anticipated exit route.

The statutory purposes of administration as set out in paragraph 3(1) of Schedule B1 to the Insolvency Act 1986 (IA 1986), ranked by priority, are:

rescuing the company as a going concern
delivering a better result for creditors as a whole than would be expected on a winding up, or
realisation of the company’s assets to enable a distribution to one or more secured or preferential creditors

In some situations, a pre‑pack sale may fulfil the chosen objective; in others, it can be preferable to continue trading for a period of time before a sale or another exit path. This Practice Note gives a high‑level overview of the practical issues the administrator will take into account...

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Web page updated on 27/05/2026

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