Concept in Definition ABC

When an extraordinary period of time is granted to pay a debt or to carry out mandatory procedures, a moratorium occurs. This term comes from the Latin moratorium and is equivalent to extension.

It is normally used in relation to debts contracted by taxpayers or in reference to the various obligations of citizens with respect to the administration.

We emphasize that to access a moratorium, interested citizens must meet a series of requirements and also carry out a series of procedures.

Tax moratorium

Sometimes taxpayers have been unable or unwilling to assume their responsibilities with respect to paying taxes. Faced with this circumstance, the state may establish a moratorium or extension process in which a series of conditions so that citizens can regularize their situation and pay taxes that had not been paid out.

This process is directly related to the so-called tax honesty or money laundering. Each rule or law The tax moratorium has a specific purpose: to make it easier for merchants to pay their taxes in a period of economic crisis, to promote mechanisms to reduce the

economy submerged, activate a procedure so that the state can deal with the public debt, etc.

Mortgage moratorium

A significant part of the population has their home mortgaged. If there is a period of economic recession, many people will find it difficult to pay the bank the mortgage payments and this situation could lead to the loss of the property due to default. Faced with these types of circumstances, a state can promote a mortgage moratorium law and with it a series of facilities are presented to pay the mortgage installments.

Nuclear moratorium

Many countries have paralyzed investments on nuclear energy to avoid risks of accidents at nuclear power plants, due to pressure from environmental groups or for the purpose of encouraging other Energy sources. This stoppage is known as a nuclear moratorium.

This moratorium has a series of economic consequences, since the bill of the electricity that the citizen pays is increased to compensate the expenses that the electricity companies have assumed in their investments in nuclear energy. In short, in any nuclear moratorium there is a conflict interests between the state that regulates energy, electricity companies interested in nuclear energy and citizens.

Photos: Fotolia - sawitreelyaon / pixarno

Moratorium Issues