In Singapore, a moratorium is a legal mechanism that provides temporary relief to businesses facing financial difficulties. It essentially halts legal actions, enforcement proceedings, or debt recovery efforts during the moratorium period and provides time to the moratorium applicant to restructure their finances, negotiate with creditors, or find other solutions address their financial issues without the immediate threat of legal action or insolvency proceedings.
In few cases, such as those that are initiated under Insolvency, Restructuring, and Dissolution Act (IRDA), an automatic moratorium of 30 days is granted. In other cases, a moratorium needs to be granted by the courts upon application, and requires demonstrating that the moratorium is necessary to facilitate a restructuring process.
How does the Moratorium process work?
