"Quita y espera" is actually defined in the DRAE:

"quita y espera.
1. f. Der. Petición que un deudor hace judicialmente a todos sus acreedores, bien para que estos aminoren los créditos o aplacen el cobro, o bien para una u otra de ambas concesiones."
http://lema.rae.es/drae/?val=quita

So as Lorena has already shown, the "quita" part is cancelling part of the debt, reducing the amount of the debt, and "espera" is postponing payment, and either of both can be involved.

In effect, this is a petition for debt restructuring:
"Debt restructurings typically involve a reduction of debt and an extension of payment terms."
http://en.wikipedia.org/wiki/Debt_restructuring

However, I'd be inclined to use the more exact formula quoted. The translation in Lorena's source, "reduction and moratorium of debt", is used in two or three Spanish sites with reference to quita y espera, but I think the alternative I've mentioned is a more suitable expression and it is what is used in EU law. "Quita" is discharge or debt and "espera" is stay of payment", but they tend to occur more often the other way round in English:

"There exist also distinct proceedings, with a preventive or preliminary character, such as the suspension of payments 'suspension de pagos'), the discharge of debts ('quita') and the stay of payments ('espera'), which in some cases do not have clearly defined boundaries, with rules that tend to overlap and to create confusion. [...]
The restrictions of the creditors’ rights arising from an agreement reached in the territorial proceedings, such as a discharge of debt or stay of payment shall only have effects in respect of the debtor’s assets not covered by those proceedings with the consent of all the interested creditors (art. 215 Proposal in line with art. 34(2) of EC Regulation)."
Prof. Dr. Bob Wessels, "The Reform of the Spanish Insolvency Law:
Proposal No 101-1 of 23 July 2002"
http://www.iiiglobal.org/component/jdownloads/finish/412/149...

"These measures are essentially discharge of debts and stay of payment of debts (quita y espera) taken voluntarily — by the institution — or imposed by the FROB"
The Spanish Bail-In Tool: Restructuring of Certain Bank Liabilities in Royal Decree-Law 24/2012 (Linklaters)
http://www.linklaters.com/pdfs/mkt/madrid/120912_Alert_RDL_2...

"Any restriction of the creditors' rights, in particular a stay or discharge, shall produce effects vis-à-vis assets situated within the territory of another Member State only in the case of those creditors who have given their consent. [...]"
http://eur-lex.europa.eu/Notice.do?val=238577:cs&lang=cs&lis...

http://books.google.es/books?id=TIFuIot5E6kC&pg=PA156&lpg=PA...