What Is a Moratorium? Definition and Practical Examples

By Frank Bass – Updated Mar 12, 2025 at 3:25 PM EST

Key Points

Moratoriums halt financial obligations to provide temporary relief.
An example is the COVID-19 moratorium on evictions during the beginning of the pandemic.
Moratoriums are different from grace periods in that grace periods are typically much shorter.

A moratorium is the delay of an activity or a law. In business, it's most commonly used to describe a temporary halt to a financial activity, such as the repayment of a loan. Read on for more information about how a moratorium works, when one might be announced, and a fairly recent example of a moratorium that affected millions of Americans.

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In September 2020, the federal government took the unprecedented step of announcing a moratorium on evictions through January 2021. Between March 2020 and October 2021, COVID-19 accounted for 697,000 U.S. deaths, roughly one-eighth of the total and the third-leading cause of death in the country. The moratorium, which was announced by the U.S. Centers for Disease Control and Prevention, was eventually lifted in August 2021 after the Supreme Court ruled in favor of a lawsuit brought by the Alabama Association of Realtors.

Although it was relatively short-lived, the Urban Institute reported that the eviction moratorium saved tens of thousands of lives while preventing more than 1.5 million Americans from losing their homes.

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About the Author

Frank Bass is a contributing Motley Fool stock market analyst and editor covering energy, healthcare, consumer, and financial sectors. Frank has decades of experience in financial journalism, holding reporting and editing roles at The Wall Street Journal, The Associated Press, and Bloomberg. He also currently edits research on the global energy transition. He holds a bachelor’s degree in journalism from Texas Tech University and is a graduate student at the University of Alaska Fairbanks. Fun Facts: Frank has hiked The Long Trail in Vermont from end to end, and currently lives in a semi-dry cabin in Interior Alaska.

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