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A moratorium is a temporary suspension of an activity, often used in legal situations where parties have the right to be relieved of obligations. It can be voluntary or involuntary, and may be used for exploratory purposes or to benefit authorities. Examples include foreclosure moratoriums and bankruptcy cases.
A moratorium suspends an activity. This term is often used in a legal sense to refer to an obligation or experience from which a party has the right to be relieved. Moratoriums are used in a number of situations, including those involving debt repayment.
Legal obligations are a common part of a functioning society. However, there are some cases where the parties authorized to do so decide that it is better to relieve people of certain obligations. The term moratorium is commonly used in situations where the suspension of business is not permanent. In many cases, the suspension ends when a certain date arrives, the start of a certain event, or the occurrence of a certain set of circumstances.
Many definitions refer to moratoriums as the voluntary suspension of activities. However, this definition is imprecise. The economic crisis that hit the United States (USA) in 2008 is a prime example of this.
A huge number of people have experienced foreclosure. As governments struggled to develop solutions, politicians began proposing laws to impose a moratorium on foreclosures. California is one state that successfully passed legislation that temporarily prevented some foreclosures from being enforced.
Bankruptcy is another example of an involuntary moratorium. When a person has an active bankruptcy case, there is a moratorium on debt collection efforts by creditors. This is not because all creditors naturally stop trying to collect money from bankrupt individuals. Rather, the suspension of collection efforts results because the law forbids it.
Moratoriums can be for exploratory purposes. This can be seen when there is a great deal of controversy surrounding a particular issue. Until conclusions can be drawn or solutions can be reached, officials may find it necessary to relieve those affected by the policy of their obligation to comply.
In some cases, moratoriums may not benefit the public. The suspension of certain activities can be to the advantage of the authorities. Countries hosting international sporting events commonly debate the moratorium on certain crimes.
Before the 2010 World Cup events in South Africa, there were advocates of a moratorium on prostitution. Supporters of this move have argued that police should focus on more serious crimes. There were also concerns that the courts were being overwhelmed with these matters, which many people considered trivial. In that case, if a moratorium were granted, the authorities would be deprived of the power to take action against prostitution. It should be noted, however, that the law against prostitution would technically still exist even if it were suspended.
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