The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020, which will come into force on 4 May 2021, will provide individuals with the opportunity to obtain legal protection from creditors in the form of either a breathing space moratorium or a mental health crisis moratorium. Given the economic impact of the Covid-19 pandemic, there may be a significant number of individuals seeking to obtain a moratorium to pause action against them to recover debts.

Protecting debtors

Where the law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency and criminal proceedings (COVInsAG) is concerned, the German Parliament has introduced rules regarding the suspension of a managing director’s obligation to file for insolvency. It has also issued important statements regarding the liability of managing directors and the legal position of new loans, especially shareholder loans.

In the event that the obligation to file for insolvency is suspended: