Mental Health Moratorium: consultation

The Bankruptcy and Diligence (Scotland) Bill contains powers which would allow Scottish Ministers to create a Mental Health Moratorium. This would protect people with serious mental health issues from debt recovery action. We are seeking views on the proposed process for a Mental Health Moratorium.


The Scottish Government committed to a policy review of Scotland’s statutory debt solutions (moratorium protection, bankruptcy, Protected Trust Deeds and the Debt Arrangement Scheme) with the aim of further enhancing and improving our system.

The first stage of the policy review dealt with the priorities to be taken forward to help address the immediate impact of the COVID-19 pandemic. The second stage of the review was undertaken by stakeholder-led working groups which drew on a wide range of expertise and knowledge from representatives of all sectors involved in the debt landscape. The introduction of a Mental Health Moratorium in Scotland was recommended by the stage 2 working group.

They recognised the benefits in establishing a specific tool which ensures people struggling with mental health and finances have access to breathing space and respite. Among the reasons that have been given for creating a specific Mental Health Moratorium are that people who are in crisis care generally cannot access more conventional forms of money advice. Also, the length of someone’s mental health crisis can vary, therefore, the moratorium should align to that. The prospect of the moratorium stopping during a person’s mental health crisis and not providing additional protections (such as preventing the creditor from contacting the individual) could create a risk of worsening the individual’s mental and financial health issues.

The consultation ‘Scotland’s statutory debt solutions and diligence – policy review response’ sets out the Scottish Government’s response to the second stage of the review. One of the included proposals was to engage with key stakeholders when designing the detailed process for the Mental Health Moratorium. This proposal received overwhelming support from respondents, as reported in the Statutory debt solutions and diligence - policy review consultation: summary of responses.

As a result, the Mental Health Moratorium Working Group was formed to look at possible ways the Mental Health Moratorium could work in practice. The membership includes mental health professionals, representatives from the debt advice community and the creditor sector. A series of meetings and in-depth discussions resulted in the publication of the Mental Health Moratorium Working Group - report of recommendations.

On 27 April 2023, the Bankruptcy and Diligence (Scotland) Bill was introduced to Parliament. This included the introduction of a power enabling Scottish Ministers to introduce a Mental Health Moratorium. Secondary legislation which will support this Bill will contain the detail of the process for a Mental Health Moratorium.

The Economy and Fair Work Committee is leading on the scrutiny of the Bankruptcy and Diligence (Scotland) Bill and issued a call for evidence which closed on 21 July 2023. Responses to the call for evidence have been received and can be viewed on the Scottish Parliament website.

The basis of this consultation has been formed from the Mental Health Moratorium Working Group’s report of recommendations, the responses to the Economy and Fair Work Committee’s calls for evidence, and other stakeholder engagement which has been undertaken.

The feedback received during this consultation will enable us to finalise the process for a Mental Health Moratorium and develop the necessary regulations subject of course to the will of Parliament and the enabling power being passed.



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