diff --git a/src/app/Backends/LDAP.php b/src/app/Backends/LDAP.php
--- a/src/app/Backends/LDAP.php
+++ b/src/app/Backends/LDAP.php
@@ -757,11 +757,11 @@
      */
     private static function setUserAttributes(User $user, array &$entry)
     {
+        $isDegraded = $user->isDegraded(true);
         $settings = $user->getSettings(['first_name', 'last_name', 'organization']);
 
         $firstName = $settings['first_name'];
         $lastName = $settings['last_name'];
-
         $cn = "unknown";
         $displayname = "";
 
@@ -821,12 +821,18 @@
             $entry['nsroledn'][] = "cn=2fa-user,{$hostedRootDN}";
         }
 
-        if (in_array("activesync", $roles)) {
-            $entry['nsroledn'][] = "cn=activesync-user,{$hostedRootDN}";
-        }
 
-        if (!in_array("groupware", $roles)) {
-            $entry['nsroledn'][] = "cn=imap-user,{$hostedRootDN}";
+        if ($isDegraded) {
+            $entry['nsroledn'][] = "cn=degraded-user,{$hostedRootDN}";
+            $entry['mailquota'] = \config('app.storage.min_qty') * 1048576;
+        } else {
+            if (in_array("activesync", $roles)) {
+                $entry['nsroledn'][] = "cn=activesync-user,{$hostedRootDN}";
+            }
+
+            if (!in_array("groupware", $roles)) {
+                $entry['nsroledn'][] = "cn=imap-user,{$hostedRootDN}";
+            }
         }
     }
 
diff --git a/src/app/Console/Commands/User/DegradeCommand.php b/src/app/Console/Commands/User/DegradeCommand.php
new file mode 100644
--- /dev/null
+++ b/src/app/Console/Commands/User/DegradeCommand.php
@@ -0,0 +1,39 @@
+<?php
+
+namespace App\Console\Commands\User;
+
+use App\Console\Command;
+
+class DegradeCommand extends Command
+{
+    /**
+     * The name and signature of the console command.
+     *
+     * @var string
+     */
+    protected $signature = 'user:degrade {user}';
+
+    /**
+     * The console command description.
+     *
+     * @var string
+     */
+    protected $description = 'Degrade a user';
+
+    /**
+     * Execute the console command.
+     *
+     * @return mixed
+     */
+    public function handle()
+    {
+        $user = $this->getUser($this->argument('user'));
+
+        if (!$user) {
+            $this->error('User not found.');
+            return 1;
+        }
+
+        $user->degrade();
+    }
+}
diff --git a/src/app/Console/Commands/User/GreylistCommand.php b/src/app/Console/Commands/User/GreylistCommand.php
--- a/src/app/Console/Commands/User/GreylistCommand.php
+++ b/src/app/Console/Commands/User/GreylistCommand.php
@@ -20,16 +20,6 @@
      */
     protected $description = 'List currently greylisted delivery attempts for the user.';
 
-    /**
-     * Create a new command instance.
-     *
-     * @return void
-     */
-    public function __construct()
-    {
-        parent::__construct();
-    }
-
     /**
      * Execute the console command.
      *
diff --git a/src/app/Console/Commands/User/StatusCommand.php b/src/app/Console/Commands/User/StatusCommand.php
--- a/src/app/Console/Commands/User/StatusCommand.php
+++ b/src/app/Console/Commands/User/StatusCommand.php
@@ -2,6 +2,7 @@
 
 namespace App\Console\Commands\User;
 
+use App\User;
 use Illuminate\Console\Command;
 
 class StatusCommand extends Command
@@ -20,16 +21,6 @@
      */
     protected $description = "Show a user's status.";
 
-    /**
-     * Create a new command instance.
-     *
-     * @return void
-     */
-    public function __construct()
-    {
-        parent::__construct();
-    }
-
     /**
      * Execute the console command.
      *
@@ -37,10 +28,10 @@
      */
     public function handle()
     {
-        $user = \App\User::withTrashed()->withEnvTenantContext()->where('email', $this->argument('user'))->first();
+        $user = User::withTrashed()->withEnvTenantContext()->where('email', $this->argument('user'))->first();
 
         if (!$user) {
-            $user = \App\User::withTrashed()->withEnvTenantContext()->where('id', $this->argument('user'))->first();
+            $user = User::withTrashed()->withEnvTenantContext()->where('id', $this->argument('user'))->first();
         }
 
         if (!$user) {
@@ -50,11 +41,12 @@
         }
 
         $statuses = [
-            'active' => \App\User::STATUS_ACTIVE,
-            'suspended' => \App\User::STATUS_SUSPENDED,
-            'deleted' => \App\User::STATUS_DELETED,
-            'ldapReady' => \App\User::STATUS_LDAP_READY,
-            'imapReady' => \App\User::STATUS_IMAP_READY,
+            'active' => User::STATUS_ACTIVE,
+            'suspended' => User::STATUS_SUSPENDED,
+            'deleted' => User::STATUS_DELETED,
+            'ldapReady' => User::STATUS_LDAP_READY,
+            'imapReady' => User::STATUS_IMAP_READY,
+            'degraded' => User::STATUS_DEGRADED,
         ];
 
         $user_state = [];
diff --git a/src/app/Console/Commands/User/UndegradeCommand.php b/src/app/Console/Commands/User/UndegradeCommand.php
new file mode 100644
--- /dev/null
+++ b/src/app/Console/Commands/User/UndegradeCommand.php
@@ -0,0 +1,39 @@
+<?php
+
+namespace App\Console\Commands\User;
+
+use App\Console\Command;
+
+class UndegradeCommand extends Command
+{
+    /**
+     * The name and signature of the console command.
+     *
+     * @var string
+     */
+    protected $signature = 'user:undegrade {user}';
+
+    /**
+     * The console command description.
+     *
+     * @var string
+     */
+    protected $description = 'Un-degrade a user';
+
+    /**
+     * Execute the console command.
+     *
+     * @return mixed
+     */
+    public function handle()
+    {
+        $user = $this->getUser($this->argument('user'));
+
+        if (!$user) {
+            $this->error('User not found.');
+            return 1;
+        }
+
+        $user->undegrade();
+    }
+}
diff --git a/src/app/Console/Commands/WalletCharge.php b/src/app/Console/Commands/WalletCharge.php
--- a/src/app/Console/Commands/WalletCharge.php
+++ b/src/app/Console/Commands/WalletCharge.php
@@ -59,7 +59,8 @@
             }
 
             if ($wallet->balance < 0) {
-                // Check the account balance, send notifications, suspend, delete
+                // Check the account balance, send notifications, (suspend, delete,) degrade
+                // Also sends reminders to the degraded account owners
                 \App\Jobs\WalletCheck::dispatch($wallet);
             }
         }
diff --git a/src/app/Console/Development/UserStatus.php b/src/app/Console/Development/UserStatus.php
new file mode 100644
--- /dev/null
+++ b/src/app/Console/Development/UserStatus.php
@@ -0,0 +1,87 @@
+<?php
+
+namespace App\Console\Development;
+
+use App\User;
+use Illuminate\Console\Command;
+
+class UserStatus extends Command
+{
+    /**
+     * The name and signature of the console command.
+     *
+     * @var string
+     */
+    protected $signature = 'user:status {userid} {--add=} {--del=}';
+
+    /**
+     * The console command description.
+     *
+     * @var string
+     */
+    protected $description = "Set/get a user's status.";
+
+    /**
+     * Create a new command instance.
+     *
+     * @return void
+     */
+    public function __construct()
+    {
+        parent::__construct();
+    }
+
+    /**
+     * Execute the console command.
+     *
+     * @return mixed
+     */
+    public function handle()
+    {
+        $user = User::where('email', $this->argument('userid'))->firstOrFail();
+
+        $this->info("Found user: {$user->id}");
+
+        $statuses = [
+            'active' => User::STATUS_ACTIVE,
+            'suspended' => User::STATUS_SUSPENDED,
+            'deleted' => User::STATUS_DELETED,
+            'ldapReady' => User::STATUS_LDAP_READY,
+            'imapReady' => User::STATUS_IMAP_READY,
+            'degraded' => User::STATUS_DEGRADED,
+        ];
+
+        // I'd prefer "-state" and "+state" syntax, but it's not possible
+        $delete = false;
+        if ($update = $this->option('del')) {
+            $delete = true;
+        } elseif ($update = $this->option('add')) {
+            // do nothing
+        }
+
+        if (!empty($update)) {
+            $map = \array_change_key_case($statuses);
+            $update = \strtolower($update);
+
+            if (isset($map[$update])) {
+                if ($delete && $user->status & $map[$update]) {
+                    $user->status ^= $map[$update];
+                    $user->save();
+                } elseif (!$delete && !($user->status & $map[$update])) {
+                    $user->status |= $map[$update];
+                    $user->save();
+                }
+            }
+        }
+
+        $user_state = [];
+        foreach (\array_keys($statuses) as $state) {
+            $func = 'is' . \ucfirst($state);
+            if ($user->$func()) {
+                $user_state[] = $state;
+            }
+        }
+
+        $this->info("Status: " . \implode(',', $user_state));
+    }
+}
diff --git a/src/app/Http/Controllers/API/V4/OpenViduController.php b/src/app/Http/Controllers/API/V4/OpenViduController.php
--- a/src/app/Http/Controllers/API/V4/OpenViduController.php
+++ b/src/app/Http/Controllers/API/V4/OpenViduController.php
@@ -213,7 +213,7 @@
         $room = Room::where('name', $id)->first();
 
         // Room does not exist, or the owner is deleted
-        if (!$room || !$room->owner) {
+        if (!$room || !$room->owner || $room->owner->isDegraded(true)) {
             return $this->errorResponse(404, \trans('meet.room-not-found'));
         }
 
@@ -349,7 +349,7 @@
         $room = Room::where('name', $id)->first();
 
         // Room does not exist, or the owner is deleted
-        if (!$room || !$room->owner) {
+        if (!$room || !$room->owner || $room->owner->isDegraded(true)) {
             return $this->errorResponse(404);
         }
 
diff --git a/src/app/Http/Controllers/API/V4/UsersController.php b/src/app/Http/Controllers/API/V4/UsersController.php
--- a/src/app/Http/Controllers/API/V4/UsersController.php
+++ b/src/app/Http/Controllers/API/V4/UsersController.php
@@ -550,6 +550,8 @@
             'isSuspended' => $user->isSuspended(),
             'isActive' => $user->isActive(),
             'isDeleted' => $user->isDeleted() || $user->trashed(),
+            'isDegraded' => $user->isDegraded(),
+            'isAccountDegraded' => $user->isDegraded(true),
         ];
     }
 
diff --git a/src/app/Jobs/WalletCheck.php b/src/app/Jobs/WalletCheck.php
--- a/src/app/Jobs/WalletCheck.php
+++ b/src/app/Jobs/WalletCheck.php
@@ -18,6 +18,9 @@
     use Queueable;
     use SerializesModels;
 
+    public const THRESHOLD_DEGRADE = 'degrade';
+    public const THRESHOLD_DEGRADE_REMINDER = 'degrade-reminder';
+    public const THRESHOLD_BEFORE_DEGRADE = 'before_degrade';
     public const THRESHOLD_DELETE = 'delete';
     public const THRESHOLD_BEFORE_DELETE = 'before_delete';
     public const THRESHOLD_SUSPEND = 'suspend';
@@ -63,62 +66,83 @@
         }
 
         $now = Carbon::now();
-
-        // Delete the account
-        if (self::threshold($this->wallet, self::THRESHOLD_DELETE) < $now) {
-            $this->deleteAccount();
-            return self::THRESHOLD_DELETE;
-        }
-
-        // Warn about the upcomming account deletion
-        if (self::threshold($this->wallet, self::THRESHOLD_BEFORE_DELETE) < $now) {
-            $this->warnBeforeDelete();
-            return self::THRESHOLD_BEFORE_DELETE;
+/*
+        // Steps for old "first suspend then delete" approach
+        $steps = [
+            // Send the initial reminder
+            self::THRESHOLD_INITIAL => 'initialReminder',
+            // Try to top-up the wallet before the second reminder
+            self::THRESHOLD_BEFORE_REMINDER => 'topUpWallet',
+            // Send the second reminder
+            self::THRESHOLD_REMINDER => 'secondReminder',
+            // Try to top-up the wallet before suspending the account
+            self::THRESHOLD_BEFORE_SUSPEND => 'topUpWallet',
+            // Suspend the account
+            self::THRESHOLD_SUSPEND => 'suspendAccount',
+            // Warn about the upcomming account deletion
+            self::THRESHOLD_BEFORE_DELETE => 'warnBeforeDelete',
+            // Delete the account
+            self::THRESHOLD_DELETE => 'deleteAccount',
+        ];
+*/
+        // Steps for "demote instead of suspend+delete" approach
+        $steps = [
+            // Send the initial reminder
+            self::THRESHOLD_INITIAL => 'initialReminderForDegrade',
+            // Try to top-up the wallet before the second reminder
+            self::THRESHOLD_BEFORE_REMINDER => 'topUpWallet',
+            // Send the second reminder
+            self::THRESHOLD_REMINDER => 'secondReminderForDegrade',
+            // Try to top-up the wallet before the account degradation
+            self::THRESHOLD_BEFORE_DEGRADE => 'topUpWallet',
+            // Degrade the account
+            self::THRESHOLD_DEGRADE => 'degradeAccount',
+        ];
+
+        if ($this->wallet->owner && $this->wallet->owner->isDegraded()) {
+            $this->degradedReminder();
+            return self::THRESHOLD_DEGRADE_REMINDER;
         }
 
-        // Suspend the account
-        if (self::threshold($this->wallet, self::THRESHOLD_SUSPEND) < $now) {
-            $this->suspendAccount();
-            return self::THRESHOLD_SUSPEND;
+        foreach (array_reverse($steps, true) as $type => $method) {
+            if (self::threshold($this->wallet, $type) < $now) {
+                $this->{$method}();
+                return $type;
+            }
         }
 
-        // Try to top-up the wallet before suspending the account
-        if (self::threshold($this->wallet, self::THRESHOLD_BEFORE_SUSPEND) < $now) {
-            PaymentsController::topUpWallet($this->wallet);
-            return self::THRESHOLD_BEFORE_SUSPEND;
-        }
+        return null;
+    }
 
-        // Send the second reminder
-        if (self::threshold($this->wallet, self::THRESHOLD_REMINDER) < $now) {
-            $this->secondReminder();
-            return self::THRESHOLD_REMINDER;
+    /**
+     * Send the initial reminder (for the suspend+delete process)
+     */
+    protected function initialReminder()
+    {
+        if ($this->wallet->getSetting('balance_warning_initial')) {
+            return;
         }
 
-        // Try to top-up the wallet before the second reminder
-        if (self::threshold($this->wallet, self::THRESHOLD_BEFORE_REMINDER) < $now) {
-            PaymentsController::topUpWallet($this->wallet);
-            return self::THRESHOLD_BEFORE_REMINDER;
-        }
+        // TODO: Should we check if the account is already suspended?
 
-        // Send the initial reminder
-        if (self::threshold($this->wallet, self::THRESHOLD_INITIAL) < $now) {
-            $this->initialReminder();
-            return self::THRESHOLD_INITIAL;
-        }
+        $this->sendMail(\App\Mail\NegativeBalance::class, false);
 
-        return null;
+        $now = \Carbon\Carbon::now()->toDateTimeString();
+        $this->wallet->setSetting('balance_warning_initial', $now);
     }
 
     /**
-     * Send the initial reminder
+     * Send the initial reminder (for the process of degrading a account)
      */
-    protected function initialReminder()
+    protected function initialReminderForDegrade()
     {
         if ($this->wallet->getSetting('balance_warning_initial')) {
             return;
         }
 
-        // TODO: Should we check if the account is already suspended?
+        if (!$this->wallet->owner || $this->wallet->owner->isDegraded()) {
+            return;
+        }
 
         $this->sendMail(\App\Mail\NegativeBalance::class, false);
 
@@ -127,7 +151,7 @@
     }
 
     /**
-     * Send the second reminder
+     * Send the second reminder (for the suspend+delete process)
      */
     protected function secondReminder()
     {
@@ -143,6 +167,25 @@
         $this->wallet->setSetting('balance_warning_reminder', $now);
     }
 
+    /**
+     * Send the second reminder (for the process of degrading a account)
+     */
+    protected function secondReminderForDegrade()
+    {
+        if ($this->wallet->getSetting('balance_warning_reminder')) {
+            return;
+        }
+
+        if (!$this->wallet->owner || $this->wallet->owner->isDegraded()) {
+            return;
+        }
+
+        $this->sendMail(\App\Mail\NegativeBalanceReminderDegrade::class, true);
+
+        $now = \Carbon\Carbon::now()->toDateTimeString();
+        $this->wallet->setSetting('balance_warning_reminder', $now);
+    }
+
     /**
      * Suspend the account (and send the warning)
      */
@@ -163,6 +206,7 @@
             if (
                 $entitlement->entitleable_type == \App\Domain::class
                 || $entitlement->entitleable_type == \App\User::class
+                || $entitlement->entitleable_type == \App\Group::class
             ) {
                 $entitlement->entitleable->suspend();
             }
@@ -194,6 +238,59 @@
         $this->wallet->setSetting('balance_warning_before_delete', $now);
     }
 
+    /**
+     * Send the periodic reminder to the degraded account owners
+     */
+    protected function degradedReminder()
+    {
+        // Sanity check
+        if (!$this->wallet->owner || !$this->wallet->owner->isDegraded()) {
+            return;
+        }
+
+        $now = \Carbon\Carbon::now();
+        $last = $this->wallet->getSetting('degraded_last_reminder');
+
+        if ($last) {
+            $last = new Carbon($last);
+            $period = 14;
+
+            if ($last->addDays($period) > $now) {
+                return;
+            }
+
+            $this->sendMail(\App\Mail\DegradedAccountReminder::class, true);
+        }
+
+        $this->wallet->setSetting('degraded_last_reminder', $now->toDateTimeString());
+    }
+
+    /**
+     * Degrade the account
+     */
+    protected function degradeAccount()
+    {
+        // The account may be already deleted, or degraded
+        if (!$this->wallet->owner || $this->wallet->owner->isDegraded()) {
+            return;
+        }
+
+        $email = $this->wallet->owner->email;
+
+        // The dirty work will be done by UserObserver
+        $this->wallet->owner->degrade();
+
+        \Log::info(
+            sprintf(
+                "[WalletCheck] Account degraded %s (%s)",
+                $this->wallet->id,
+                $email
+            )
+        );
+
+        $this->sendMail(\App\Mail\NegativeBalanceDegraded::class, true);
+    }
+
     /**
      * Delete the account
      */
@@ -265,47 +362,45 @@
             $negative_since = new Carbon($negative_since);
         }
 
-        $remind = 7;   // remind after first X days
-        $suspend = 14; // suspend after next X days
-        $delete = 21;  // delete after next X days
-        $warn = 3;     // warn about delete on X days before delete
-
-        // Acount deletion
-        if ($type == self::THRESHOLD_DELETE) {
-            return $negative_since->addDays($delete + $suspend + $remind);
-        }
-
-        // Warning about the upcomming account deletion
-        if ($type == self::THRESHOLD_BEFORE_DELETE) {
-            return $negative_since->addDays($delete + $suspend + $remind - $warn);
-        }
-
-        // Account suspension
-        if ($type == self::THRESHOLD_SUSPEND) {
-            return $negative_since->addDays($suspend + $remind);
-        }
-
-        // A day before account suspension
-        if ($type == self::THRESHOLD_BEFORE_SUSPEND) {
-            return $negative_since->addDays($suspend + $remind - 1);
-        }
-
-        // Second notification
-        if ($type == self::THRESHOLD_REMINDER) {
-            return $negative_since->addDays($remind);
-        }
-
-        // A day before the second reminder
-        if ($type == self::THRESHOLD_BEFORE_REMINDER) {
-            return $negative_since->addDays($remind - 1);
-        }
-
         // Initial notification
         // Give it an hour so the async recurring payment has a chance to be finished
         if ($type == self::THRESHOLD_INITIAL) {
             return $negative_since->addHours(1);
         }
 
+        $thresholds = [
+            // A day before the second reminder
+            self::THRESHOLD_BEFORE_REMINDER => 7 - 1,
+            // Second notification
+            self::THRESHOLD_REMINDER => 7,
+
+            // A day before account suspension
+            self::THRESHOLD_BEFORE_SUSPEND => 14 + 7 - 1,
+            // Account suspension
+            self::THRESHOLD_SUSPEND => 14 + 7,
+            // Warning about the upcomming account deletion
+            self::THRESHOLD_BEFORE_DELETE => 21 + 14 + 7 - 3,
+            // Acount deletion
+            self::THRESHOLD_DELETE => 21 + 14 + 7,
+
+            // Last chance to top-up the wallet
+            self::THRESHOLD_BEFORE_DEGRADE => 13,
+            // Account degradation
+            self::THRESHOLD_DEGRADE => 14,
+        ];
+
+        if (!empty($thresholds[$type])) {
+            return $negative_since->addDays($thresholds[$type]);
+        }
+
         return null;
     }
+
+    /**
+     * Try to automatically top-up the wallet
+     */
+    protected function topUpWallet(): void
+    {
+        PaymentsController::topUpWallet($this->wallet);
+    }
 }
diff --git a/src/app/Mail/DegradedAccountReminder.php b/src/app/Mail/DegradedAccountReminder.php
new file mode 100644
--- /dev/null
+++ b/src/app/Mail/DegradedAccountReminder.php
@@ -0,0 +1,82 @@
+<?php
+
+namespace App\Mail;
+
+use App\Tenant;
+use App\User;
+use App\Utils;
+use App\Wallet;
+use Illuminate\Bus\Queueable;
+use Illuminate\Mail\Mailable;
+use Illuminate\Queue\SerializesModels;
+
+class DegradedAccountReminder extends Mailable
+{
+    use Queueable;
+    use SerializesModels;
+
+    /** @var \App\Wallet A wallet with a negative balance */
+    protected $wallet;
+
+    /** @var \App\User A wallet controller to whom the email is being sent */
+    protected $user;
+
+
+    /**
+     * Create a new message instance.
+     *
+     * @param \App\Wallet $wallet A wallet
+     * @param \App\User   $user   An email recipient
+     *
+     * @return void
+     */
+    public function __construct(Wallet $wallet, User $user)
+    {
+        $this->wallet = $wallet;
+        $this->user = $user;
+    }
+
+    /**
+     * Build the message.
+     *
+     * @return $this
+     */
+    public function build()
+    {
+        $appName = Tenant::getConfig($this->user->tenant_id, 'app.name');
+        $supportUrl = Tenant::getConfig($this->user->tenant_id, 'app.support_url');
+
+        $subject = \trans('mail.degradedaccountreminder-subject', ['site' => $appName]);
+
+        $this->view('emails.html.degraded_account_reminder')
+            ->text('emails.plain.degraded_account_reminder')
+            ->subject($subject)
+            ->with([
+                    'site' => $appName,
+                    'subject' => $subject,
+                    'username' => $this->user->name(true),
+                    'supportUrl' => $supportUrl,
+                    'walletUrl' => Utils::serviceUrl('/wallet', $this->user->tenant_id),
+                    'dashboardUrl' => Utils::serviceUrl('/dashboard', $this->user->tenant_id),
+            ]);
+
+        return $this;
+    }
+
+    /**
+     * Render the mail template with fake data
+     *
+     * @param string $type Output format ('html' or 'text')
+     *
+     * @return string HTML or Plain Text output
+     */
+    public static function fakeRender(string $type = 'html'): string
+    {
+        $wallet = new Wallet();
+        $user = new User();
+
+        $mail = new self($wallet, $user);
+
+        return Helper::render($mail, $type);
+    }
+}
diff --git a/src/app/Mail/NegativeBalanceDegraded.php b/src/app/Mail/NegativeBalanceDegraded.php
new file mode 100644
--- /dev/null
+++ b/src/app/Mail/NegativeBalanceDegraded.php
@@ -0,0 +1,82 @@
+<?php
+
+namespace App\Mail;
+
+use App\Jobs\WalletCheck;
+use App\Tenant;
+use App\User;
+use App\Utils;
+use App\Wallet;
+use Illuminate\Bus\Queueable;
+use Illuminate\Mail\Mailable;
+use Illuminate\Queue\SerializesModels;
+
+class NegativeBalanceDegraded extends Mailable
+{
+    use Queueable;
+    use SerializesModels;
+
+    /** @var \App\Wallet A wallet with a negative balance */
+    protected $wallet;
+
+    /** @var \App\User A wallet controller to whom the email is being sent */
+    protected $user;
+
+
+    /**
+     * Create a new message instance.
+     *
+     * @param \App\Wallet $wallet A wallet
+     * @param \App\User   $user   An email recipient
+     *
+     * @return void
+     */
+    public function __construct(Wallet $wallet, User $user)
+    {
+        $this->wallet = $wallet;
+        $this->user = $user;
+    }
+
+    /**
+     * Build the message.
+     *
+     * @return $this
+     */
+    public function build()
+    {
+        $appName = Tenant::getConfig($this->user->tenant_id, 'app.name');
+        $supportUrl = Tenant::getConfig($this->user->tenant_id, 'app.support_url');
+
+        $subject = \trans('mail.negativebalancedegraded-subject', ['site' => $appName]);
+
+        $this->view('emails.html.negative_balance_degraded')
+            ->text('emails.plain.negative_balance_degraded')
+            ->subject($subject)
+            ->with([
+                    'site' => $appName,
+                    'subject' => $subject,
+                    'username' => $this->user->name(true),
+                    'supportUrl' => $supportUrl,
+                    'walletUrl' => Utils::serviceUrl('/wallet', $this->user->tenant_id),
+            ]);
+
+        return $this;
+    }
+
+    /**
+     * Render the mail template with fake data
+     *
+     * @param string $type Output format ('html' or 'text')
+     *
+     * @return string HTML or Plain Text output
+     */
+    public static function fakeRender(string $type = 'html'): string
+    {
+        $wallet = new Wallet();
+        $user = new User();
+
+        $mail = new self($wallet, $user);
+
+        return Helper::render($mail, $type);
+    }
+}
diff --git a/src/app/Mail/NegativeBalanceReminderDegrade.php b/src/app/Mail/NegativeBalanceReminderDegrade.php
new file mode 100644
--- /dev/null
+++ b/src/app/Mail/NegativeBalanceReminderDegrade.php
@@ -0,0 +1,84 @@
+<?php
+
+namespace App\Mail;
+
+use App\Jobs\WalletCheck;
+use App\Tenant;
+use App\User;
+use App\Utils;
+use App\Wallet;
+use Illuminate\Bus\Queueable;
+use Illuminate\Mail\Mailable;
+use Illuminate\Queue\SerializesModels;
+
+class NegativeBalanceReminderDegrade extends Mailable
+{
+    use Queueable;
+    use SerializesModels;
+
+    /** @var \App\Wallet A wallet with a negative balance */
+    protected $wallet;
+
+    /** @var \App\User A wallet controller to whom the email is being sent */
+    protected $user;
+
+
+    /**
+     * Create a new message instance.
+     *
+     * @param \App\Wallet $wallet A wallet
+     * @param \App\User   $user   An email recipient
+     *
+     * @return void
+     */
+    public function __construct(Wallet $wallet, User $user)
+    {
+        $this->wallet = $wallet;
+        $this->user = $user;
+    }
+
+    /**
+     * Build the message.
+     *
+     * @return $this
+     */
+    public function build()
+    {
+        $appName = Tenant::getConfig($this->user->tenant_id, 'app.name');
+        $supportUrl = Tenant::getConfig($this->user->tenant_id, 'app.support_url');
+        $threshold = WalletCheck::threshold($this->wallet, WalletCheck::THRESHOLD_DEGRADE);
+
+        $subject = \trans('mail.negativebalancereminder-subject', ['site' => $appName]);
+
+        $this->view('emails.html.negative_balance_reminder_degrade')
+            ->text('emails.plain.negative_balance_reminder_degrade')
+            ->subject($subject)
+            ->with([
+                    'site' => $appName,
+                    'subject' => $subject,
+                    'username' => $this->user->name(true),
+                    'supportUrl' => $supportUrl,
+                    'walletUrl' => Utils::serviceUrl('/wallet', $this->user->tenant_id),
+                    'date' => $threshold->toDateString(),
+            ]);
+
+        return $this;
+    }
+
+    /**
+     * Render the mail template with fake data
+     *
+     * @param string $type Output format ('html' or 'text')
+     *
+     * @return string HTML or Plain Text output
+     */
+    public static function fakeRender(string $type = 'html'): string
+    {
+        $wallet = new Wallet();
+        $user = new User();
+
+        $mail = new self($wallet, $user);
+
+        return Helper::render($mail, $type);
+    }
+}
diff --git a/src/app/Observers/EntitlementObserver.php b/src/app/Observers/EntitlementObserver.php
--- a/src/app/Observers/EntitlementObserver.php
+++ b/src/app/Observers/EntitlementObserver.php
@@ -116,6 +116,10 @@
 
         $owner = $entitlement->wallet->owner;
 
+        if ($owner->isDegraded()) {
+            return;
+        }
+
         // Determine if we're still within the free first month
         $freeMonthEnds = $owner->created_at->copy()->addMonthsWithoutOverflow(1);
 
diff --git a/src/app/Observers/UserObserver.php b/src/app/Observers/UserObserver.php
--- a/src/app/Observers/UserObserver.php
+++ b/src/app/Observers/UserObserver.php
@@ -361,14 +361,50 @@
     }
 
     /**
-     * Handle the "updating" event.
+     * Handle the "updated" event.
      *
      * @param User $user The user that is being updated.
      *
      * @return void
      */
-    public function updating(User $user)
+    public function updated(User $user)
     {
         \App\Jobs\User\UpdateJob::dispatch($user->id);
+
+        $oldStatus = $user->getOriginal('status');
+        $newStatus = $user->status;
+
+        if (($oldStatus & User::STATUS_DEGRADED) !== ($newStatus & User::STATUS_DEGRADED)) {
+            $wallets = [];
+            $isDegraded = $user->isDegraded();
+
+            // Charge all entitlements as if they were being deleted,
+            // but don't delete them. Just debit the wallet and update
+            // entitlements' updated_at timestamp. On un-degrade we still
+            // update updated_at, but with no debit (the cost is 0 on a degraded account).
+            foreach ($user->wallets as $wallet) {
+                $wallet->updateEntitlements($isDegraded);
+
+                // Remember time of the degradation for sending periodic reminders
+                // and reset it on un-degradation
+                $val = $isDegraded ? \Carbon\Carbon::now()->toDateTimeString() : null;
+                $wallet->setSetting('degraded_last_reminder', $val);
+
+                $wallets[] = $wallet->id;
+            }
+
+            // (Un-)degrade users by invoking an update job.
+            // LDAP backend will read the wallet owner's degraded status and
+            // set LDAP attributes accordingly.
+            // We do not change their status as their wallets have its own state
+            \App\Entitlement::whereIn('wallet_id', $wallets)
+                ->where('entitleable_id', '!=', $user->id)
+                ->where('entitleable_type', User::class)
+                ->pluck('entitleable_id')
+                ->unique()
+                ->each(function ($user_id) {
+                    \App\Jobs\User\UpdateJob::dispatch($user_id);
+                });
+        }
     }
 }
diff --git a/src/app/Observers/WalletObserver.php b/src/app/Observers/WalletObserver.php
--- a/src/app/Observers/WalletObserver.php
+++ b/src/app/Observers/WalletObserver.php
@@ -95,14 +95,20 @@
                     'balance_warning_before_delete' => null,
             ]);
 
-            // Unsuspend the account/domains/users
+            // FIXME: Since we use account degradation, should we leave suspended state untouched?
+
+            // Un-suspend and un-degrade the account owner
             if ($wallet->owner) {
                 $wallet->owner->unsuspend();
+                $wallet->owner->undegrade();
             }
+
+            // Un-suspend domains/users/groups
             foreach ($wallet->entitlements as $entitlement) {
                 if (
                     $entitlement->entitleable_type == \App\Domain::class
                     || $entitlement->entitleable_type == \App\User::class
+                    || $entitlement->entitleable_type == \App\Group::class
                 ) {
                     $entitlement->entitleable->unsuspend();
                 }
diff --git a/src/app/User.php b/src/app/User.php
--- a/src/app/User.php
+++ b/src/app/User.php
@@ -43,6 +43,8 @@
     public const STATUS_LDAP_READY = 1 << 4;
     // user mailbox has been created in IMAP
     public const STATUS_IMAP_READY = 1 << 5;
+    // user in "limited feature-set" state
+    public const STATUS_DEGRADED   = 1 << 6;
 
 
     // change the default primary key type
@@ -289,6 +291,21 @@
         return $this->canDelete($object);
     }
 
+    /**
+     * Degrade the user
+     *
+     * @return void
+     */
+    public function degrade(): void
+    {
+        if ($this->isDegraded()) {
+            return;
+        }
+
+        $this->status |= User::STATUS_DEGRADED;
+        $this->save();
+    }
+
     /**
      * Return the \App\Domain for this user.
      *
@@ -476,7 +493,7 @@
     }
 
     /**
-     * Returns whether this domain is active.
+     * Returns whether this user is active.
      *
      * @return bool
      */
@@ -486,7 +503,28 @@
     }
 
     /**
-     * Returns whether this domain is deleted.
+     * Returns whether this user (or its wallet owner) is degraded.
+     *
+     * @param bool $owner Check also the wallet owner instead just the user himself
+     *
+     * @return bool
+     */
+    public function isDegraded(bool $owner = false): bool
+    {
+        if ($this->status & self::STATUS_DEGRADED) {
+            return true;
+        }
+
+        if ($owner) {
+            $owner = $this->wallet()->owner;
+            return $owner && $owner->isDegraded();
+        }
+
+        return false;
+    }
+
+    /**
+     * Returns whether this user is deleted.
      *
      * @return bool
      */
@@ -496,8 +534,7 @@
     }
 
     /**
-     * Returns whether this (external) domain has been verified
-     * to exist in DNS.
+     * Returns whether this user is registered in IMAP.
      *
      * @return bool
      */
@@ -527,7 +564,7 @@
     }
 
     /**
-     * Returns whether this domain is suspended.
+     * Returns whether this user is suspended.
      *
      * @return bool
      */
@@ -640,7 +677,7 @@
     }
 
     /**
-     * Suspend this domain.
+     * Suspend this user.
      *
      * @return void
      */
@@ -665,7 +702,22 @@
     }
 
     /**
-     * Unsuspend this domain.
+     * Un-degrade this user.
+     *
+     * @return void
+     */
+    public function undegrade(): void
+    {
+        if (!$this->isDegraded()) {
+            return;
+        }
+
+        $this->status ^= User::STATUS_DEGRADED;
+        $this->save();
+    }
+
+    /**
+     * Unsuspend this user.
      *
      * @return void
      */
@@ -781,6 +833,7 @@
             self::STATUS_DELETED,
             self::STATUS_LDAP_READY,
             self::STATUS_IMAP_READY,
+            self::STATUS_DEGRADED,
         ];
 
         foreach ($allowed_values as $value) {
diff --git a/src/app/Wallet.php b/src/app/Wallet.php
--- a/src/app/Wallet.php
+++ b/src/app/Wallet.php
@@ -58,7 +58,14 @@
         }
     }
 
-    public function chargeEntitlements($apply = true)
+    /**
+     * Charge entitlements in the wallet
+     *
+     * @param bool $apply Set to false for a dry-run mode
+     *
+     * @return int Charged amount in cents
+     */
+    public function chargeEntitlements($apply = true): int
     {
         // This wallet has been created less than a month ago, this is the trial period
         if ($this->owner->created_at >= Carbon::now()->subMonthsWithoutOverflow(1)) {
@@ -79,13 +86,16 @@
         $profit = 0;
         $charges = 0;
         $discount = $this->getDiscountRate();
+        $isDegraded = $this->owner->isDegraded();
 
-        DB::beginTransaction();
+        if ($apply) {
+            DB::beginTransaction();
+        }
 
         // used to parent individual entitlement billings to the wallet debit.
         $entitlementTransactions = [];
 
-        foreach ($this->entitlements()->get()->fresh() as $entitlement) {
+        foreach ($this->entitlements()->get() as $entitlement) {
             // This entitlement has been created less than or equal to 14 days ago (this is at
             // maximum the fourteenth 24-hour period).
             if ($entitlement->created_at > Carbon::now()->subDays(14)) {
@@ -104,6 +114,10 @@
                 $cost = (int) ($entitlement->cost * $discount * $diff);
                 $fee = (int) ($entitlement->fee * $diff);
 
+                if ($isDegraded) {
+                    $cost = 0;
+                }
+
                 $charges += $cost;
                 $profit += $cost - $fee;
 
@@ -140,9 +154,9 @@
                     $wallet->{$method}(abs($profit), $desc);
                 }
             }
-        }
 
-        DB::commit();
+            DB::commit();
+        }
 
         return $charges;
     }
@@ -414,4 +428,72 @@
             ]
         );
     }
+
+    /**
+     * Force-update entitlements' updated_at, charge if needed.
+     *
+     * @param bool $withCost When enabled the cost will be charged
+     *
+     * @return int Charged amount in cents
+     */
+    public function updateEntitlements($withCost = true): int
+    {
+        $charges = 0;
+        $discount = $this->getDiscountRate();
+        $now = Carbon::now();
+
+        DB::beginTransaction();
+
+        // used to parent individual entitlement billings to the wallet debit.
+        $entitlementTransactions = [];
+
+        foreach ($this->entitlements()->get() as $entitlement) {
+            $cost = 0;
+            $diffInDays = $entitlement->updated_at->diffInDays($now);
+
+            // This entitlement has been created less than or equal to 14 days ago (this is at
+            // maximum the fourteenth 24-hour period).
+            if ($entitlement->created_at > Carbon::now()->subDays(14)) {
+                // $cost=0
+            } elseif ($withCost && $diffInDays > 0) {
+                // The price per day is based on the number of days in the last month
+                // or the current month if the period does not overlap with the previous month
+                // FIXME: This really should be simplified to constant $daysInMonth=30
+                if ($now->day >= $diffInDays && $now->month == $entitlement->updated_at->month) {
+                    $daysInMonth = $now->daysInMonth;
+                } else {
+                    $daysInMonth = \App\Utils::daysInLastMonth();
+                }
+
+                $pricePerDay = $entitlement->cost / $daysInMonth;
+
+                $cost = (int) (round($pricePerDay * $discount * $diffInDays, 0));
+            }
+
+            if ($diffInDays > 0) {
+                $entitlement->updated_at = $entitlement->updated_at->setDateFrom($now);
+                $entitlement->save();
+            }
+
+            if ($cost == 0) {
+                continue;
+            }
+
+            $charges += $cost;
+
+            // FIXME: Shouldn't we store also cost=0 transactions (to have the full history)?
+            $entitlementTransactions[] = $entitlement->createTransaction(
+                \App\Transaction::ENTITLEMENT_BILLED,
+                $cost
+            );
+        }
+
+        if ($charges > 0) {
+            $this->debit($charges, '', $entitlementTransactions);
+        }
+
+        DB::commit();
+
+        return $charges;
+    }
 }
diff --git a/src/config/app.php b/src/config/app.php
--- a/src/config/app.php
+++ b/src/config/app.php
@@ -268,6 +268,10 @@
         'footer' => env('COMPANY_FOOTER', env('COMPANY_DETAILS')),
     ],
 
+    'storage' => [
+        'min_qty' => (int) env('STORAGE_MIN_QTY', 5), // in GB
+    ],
+
     'vat' => [
         'countries' => env('VAT_COUNTRIES'),
         'rate' => (float) env('VAT_RATE'),
diff --git a/src/resources/js/app.js b/src/resources/js/app.js
--- a/src/resources/js/app.js
+++ b/src/resources/js/app.js
@@ -333,6 +333,9 @@
 
             return this.$t('status.active')
         },
+        isDegraded() {
+            return store.state.authInfo.isAccountDegraded
+        },
         pageName(path) {
             let page = this.$route.path
 
@@ -371,7 +374,7 @@
                 return 'text-muted'
             }
 
-            if (user.isSuspended) {
+            if (user.isDegraded || user.isAccountDegraded || user.isSuspended) {
                 return 'text-warning'
             }
 
@@ -386,6 +389,10 @@
                 return this.$t('status.deleted')
             }
 
+            if (user.isDegraded || user.isAccountDegraded) {
+                return this.$t('status.degraded')
+            }
+
             if (user.isSuspended) {
                 return this.$t('status.suspended')
             }
diff --git a/src/resources/lang/en/mail.php b/src/resources/lang/en/mail.php
--- a/src/resources/lang/en/mail.php
+++ b/src/resources/lang/en/mail.php
@@ -17,6 +17,16 @@
     'more-info-html' => "See <a href=\":href\">here</a> for more information.",
     'more-info-text' => "See :href for more information.",
 
+    'degradedaccountreminder-subject' => ":site Reminder: Your account is free",
+    'degradedaccountreminder-body1' => "Thanks for sticking around, we remind you your account is a free "
+        . "account and restricted to receiving email, and use of the web client and cockpit only.",
+    'degradedaccountreminder-body2' => "This leaves you with an ideal account to use for account registration with third parties "
+        . "and password resets, notifications or even just subscriptions to newsletters and the like.",
+    'degradedaccountreminder-body3' => "To regain functionality such as sending email, calendars, address books, phone synchronization "
+        . "and voice & video conferencing, log on to the cockpit and make sure you have a positive account balance.",
+    'degradedaccountreminder-body4' => "You can also delete your account there, making sure your data disappears from our systems.",
+    'degradedaccountreminder-body5' => "Appreciate your business!",
+
     'negativebalance-subject' => ":site Payment Required",
     'negativebalance-body' => "This is a notification to let you know that your :site account balance has run into the negative and requires your attention. "
         . "Consider setting up an automatic payment to avoid messages like this in the future.",
@@ -29,6 +39,14 @@
     'negativebalancereminder-body-warning' => "Please, be aware that your account will be suspended "
         . "if your account balance is not settled by :date.",
 
+    'negativebalancereminderdegrade-body-warning' => "Please, be aware that your account will be degraded "
+        . "if your account balance is not settled by :date.",
+
+    'negativebalancedegraded-subject' => ":site Account Degraded",
+    'negativebalancedegraded-body' => "Your :site account has been degraded for having a negative balance for too long. "
+        . "Consider setting up an automatic payment to avoid messages like this in the future.",
+    'negativebalancedegraded-body-ext' => "Settle up now to undegrade your account:",
+
     'negativebalancesuspended-subject' => ":site Account Suspended",
     'negativebalancesuspended-body' => "Your :site account has been suspended for having a negative balance for too long. "
         . "Consider setting up an automatic payment to avoid messages like this in the future.",
diff --git a/src/resources/lang/en/ui.php b/src/resources/lang/en/ui.php
--- a/src/resources/lang/en/ui.php
+++ b/src/resources/lang/en/ui.php
@@ -299,6 +299,7 @@
         'ready-user' => "The user account is almost ready.",
         'verify' => "Verify your domain to finish the setup process.",
         'verify-domain' => "Verify domain",
+        'degraded' => "Degraded",
         'deleted' => "Deleted",
         'suspended' => "Suspended",
         'notready' => "Not Ready",
@@ -335,6 +336,8 @@
         'country' => "Country",
         'create' => "Create user",
         'custno' => "Customer No.",
+        'degraded-warning' => "The account is degraded. Some features has been disabled.",
+        'degraded-hint' => "Please, make a payment.",
         'delete' => "Delete user",
         'delete-email' => "Delete {email}",
         'delete-text' => "Do you really want to delete this user permanently?"
diff --git a/src/resources/views/emails/html/degraded_account_reminder.blade.php b/src/resources/views/emails/html/degraded_account_reminder.blade.php
new file mode 100644
--- /dev/null
+++ b/src/resources/views/emails/html/degraded_account_reminder.blade.php
@@ -0,0 +1,19 @@
+<!DOCTYPE html>
+<html lang="{{ str_replace('_', '-', app()->getLocale()) }}">
+    <head>
+        <meta charset="utf-8">
+    </head>
+    <body>
+        <p>{{ __('mail.header', ['name' => $username]) }}</p>
+
+        <p>{{ __('mail.degradedaccountreminder-body1', ['site' => $site]) }}</p>
+        <p>{{ __('mail.degradedaccountreminder-body2', ['site' => $site]) }}</p>
+        <p>{{ __('mail.degradedaccountreminder-body3', ['site' => $site]) }}</p>
+        <p><a href="{{ $dashboardUrl }}">{{ $dashboardUrl }}</a></p>
+        <p>{{ __('mail.degradedaccountreminder-body4', ['site' => $site]) }}</p>
+        <p>{{ __('mail.degradedaccountreminder-body5', ['site' => $site]) }}</p>
+
+        <p>{{ __('mail.footer1') }}</p>
+        <p>{{ __('mail.footer2', ['site' => $site]) }}</p>
+    </body>
+</html>
diff --git a/src/resources/views/emails/html/negative_balance_degraded.blade.php b/src/resources/views/emails/html/negative_balance_degraded.blade.php
new file mode 100644
--- /dev/null
+++ b/src/resources/views/emails/html/negative_balance_degraded.blade.php
@@ -0,0 +1,21 @@
+<!DOCTYPE html>
+<html lang="{{ str_replace('_', '-', app()->getLocale()) }}">
+    <head>
+        <meta charset="utf-8">
+    </head>
+    <body>
+        <p>{{ __('mail.header', ['name' => $username]) }}</p>
+
+        <p>{{ __('mail.negativebalancedegraded-body', ['site' => $site]) }}</p>
+        <p>{{ __('mail.negativebalancedegraded-body-ext', ['site' => $site]) }}</p>
+        <p><a href="{{ $walletUrl }}">{{ $walletUrl }}</a></p>
+
+@if ($supportUrl)
+        <p>{{ __('mail.support', ['site' => $site]) }}</p>
+        <p><a href="{{ $supportUrl }}">{{ $supportUrl }}</a></p>
+@endif
+
+        <p>{{ __('mail.footer1') }}</p>
+        <p>{{ __('mail.footer2', ['site' => $site]) }}</p>
+    </body>
+</html>
diff --git a/src/resources/views/emails/html/negative_balance_reminder_degrade.blade.php b/src/resources/views/emails/html/negative_balance_reminder_degrade.blade.php
new file mode 100644
--- /dev/null
+++ b/src/resources/views/emails/html/negative_balance_reminder_degrade.blade.php
@@ -0,0 +1,22 @@
+<!DOCTYPE html>
+<html lang="{{ str_replace('_', '-', app()->getLocale()) }}">
+    <head>
+        <meta charset="utf-8">
+    </head>
+    <body>
+        <p>{{ __('mail.header', ['name' => $username]) }}</p>
+
+        <p>{{ __('mail.negativebalancereminder-body', ['site' => $site]) }}</p>
+        <p>{{ __('mail.negativebalancereminder-body-ext', ['site' => $site]) }}</p>
+        <p><a href="{{ $walletUrl }}">{{ $walletUrl }}</a></p>
+        <p><b>{{ __('mail.negativebalancereminderdegrade-body-warning', ['site' => $site, 'date' => $date]) }}</b></p>
+
+@if ($supportUrl)
+        <p>{{ __('mail.support', ['site' => $site]) }}</p>
+        <p><a href="{{ $supportUrl }}">{{ $supportUrl }}</a></p>
+@endif
+
+        <p>{{ __('mail.footer1') }}</p>
+        <p>{{ __('mail.footer2', ['site' => $site]) }}</p>
+    </body>
+</html>
diff --git a/src/resources/views/emails/plain/degraded_account_reminder.blade.php b/src/resources/views/emails/plain/degraded_account_reminder.blade.php
new file mode 100644
--- /dev/null
+++ b/src/resources/views/emails/plain/degraded_account_reminder.blade.php
@@ -0,0 +1,17 @@
+{!! __('mail.header', ['name' => $username]) !!}
+
+{!! __('mail.degradedaccountreminder-body1', ['site' => $site]) !!}
+
+{!! __('mail.degradedaccountreminder-body2', ['site' => $site]) !!}
+
+{!! __('mail.degradedaccountreminder-body3', ['site' => $site]) !!}
+
+{!! $dashboardUrl !!}
+
+{!! __('mail.degradedaccountreminder-body4', ['site' => $site]) !!}
+
+{!! __('mail.degradedaccountreminder-body5', ['site' => $site]) !!}
+
+-- 
+{!! __('mail.footer1') !!}
+{!! __('mail.footer2', ['site' => $site]) !!}
diff --git a/src/resources/views/emails/plain/negative_balance_degraded.blade.php b/src/resources/views/emails/plain/negative_balance_degraded.blade.php
new file mode 100644
--- /dev/null
+++ b/src/resources/views/emails/plain/negative_balance_degraded.blade.php
@@ -0,0 +1,17 @@
+{!! __('mail.header', ['name' => $username]) !!}
+
+{!! __('mail.negativebalancedegraded-body', ['site' => $site]) !!}
+
+{!! __('mail.negativebalancedegraded-body-ext', ['site' => $site]) !!}
+
+{!! $walletUrl !!}
+
+@if ($supportUrl)
+{!! __('mail.support', ['site' => $site]) !!}
+
+{!! $supportUrl !!}
+@endif
+
+-- 
+{!! __('mail.footer1') !!}
+{!! __('mail.footer2', ['site' => $site]) !!}
diff --git a/src/resources/views/emails/plain/negative_balance_reminder_degrade.blade.php b/src/resources/views/emails/plain/negative_balance_reminder_degrade.blade.php
new file mode 100644
--- /dev/null
+++ b/src/resources/views/emails/plain/negative_balance_reminder_degrade.blade.php
@@ -0,0 +1,19 @@
+{!! __('mail.header', ['name' => $username]) !!}
+
+{!! __('mail.negativebalancereminder-body', ['site' => $site]) !!}
+
+{!! __('mail.negativebalancereminder-body-ext', ['site' => $site]) !!}
+
+{!! $walletUrl !!}
+
+{!! __('mail.negativebalancereminderdegrade-body-warning', ['site' => $site, 'date' => $date]) !!}
+
+@if ($supportUrl)
+{!! __('mail.support', ['site' => $site]) !!}
+
+{!! $supportUrl !!}
+@endif
+
+-- 
+{!! __('mail.footer1') !!}
+{!! __('mail.footer2', ['site' => $site]) !!}
diff --git a/src/resources/vue/App.vue b/src/resources/vue/App.vue
--- a/src/resources/vue/App.vue
+++ b/src/resources/vue/App.vue
@@ -63,6 +63,22 @@
             childMounted() {
                 this.$root.updateBodyClass()
                 this.getFAQ()
+                this.degradedWarning()
+            },
+            degradedWarning() {
+                // Display "Account Degraded" warning on all pages
+                if (this.$root.isDegraded()) {
+                    let message = this.$t('user.degraded-warning')
+
+                    if (this.$store.state.authInfo.isDegraded) {
+                        message += ' ' + this.$t('user.degraded-hint')
+                    }
+
+                    const html = `<div id="status-degraded" class="d-flex justify-content-center">`
+                        + `<p class="alert alert-danger">${message}</p></div>`
+
+                    $('#app > div.container').prepend(html)
+                }
             },
             getFAQ() {
                 let page = this.$route.path
diff --git a/src/resources/vue/Dashboard.vue b/src/resources/vue/Dashboard.vue
--- a/src/resources/vue/Dashboard.vue
+++ b/src/resources/vue/Dashboard.vue
@@ -19,7 +19,7 @@
                 <svg-icon icon="wallet"></svg-icon><span class="name">{{ $t('dashboard.wallet') }}</span>
                 <span v-if="balance < 0" class="badge badge-danger">{{ $root.price(balance) }}</span>
             </router-link>
-            <router-link v-if="$root.hasSKU('meet')" class="card link-chat" :to="{ name: 'rooms' }">
+            <router-link v-if="$root.hasSKU('meet') && !$root.isDegraded()" class="card link-chat" :to="{ name: 'rooms' }">
                 <svg-icon icon="comments"></svg-icon><span class="name">{{ $t('dashboard.chat') }}</span>
                 <span class="badge badge-primary">{{ $t('dashboard.beta') }}</span>
             </router-link>
diff --git a/src/resources/vue/Rooms.vue b/src/resources/vue/Rooms.vue
--- a/src/resources/vue/Rooms.vue
+++ b/src/resources/vue/Rooms.vue
@@ -41,7 +41,7 @@
             }
         },
         mounted() {
-            if (!this.$root.hasSKU('meet')) {
+            if (!this.$root.hasSKU('meet') || this.$root.isDegraded()) {
                 this.$root.errorPage(403)
                 return
             }
diff --git a/src/resources/vue/User/List.vue b/src/resources/vue/User/List.vue
--- a/src/resources/vue/User/List.vue
+++ b/src/resources/vue/User/List.vue
@@ -4,7 +4,7 @@
             <div class="card-body">
                 <div class="card-title">
                     {{ $t('user.list-title') }}
-                    <router-link class="btn btn-success float-right create-user" :to="{ path: 'user/new' }" tag="button">
+                    <router-link v-if="!$root.isDegraded()" class="btn btn-success float-right create-user" :to="{ path: 'user/new' }" tag="button">
                         <svg-icon icon="user"></svg-icon> {{ $t('user.create') }}
                     </router-link>
                 </div>
diff --git a/src/tests/Browser/DegradedAccountTest.php b/src/tests/Browser/DegradedAccountTest.php
new file mode 100644
--- /dev/null
+++ b/src/tests/Browser/DegradedAccountTest.php
@@ -0,0 +1,94 @@
+<?php
+
+namespace Tests\Browser;
+
+use App\User;
+use Tests\Browser;
+use Tests\Browser\Pages\Dashboard;
+use Tests\Browser\Pages\Home;
+use Tests\Browser\Pages\UserList;
+use Tests\TestCaseDusk;
+
+class DegradedAccountTest extends TestCaseDusk
+{
+    /**
+     * {@inheritDoc}
+     */
+    public function setUp(): void
+    {
+        parent::setUp();
+
+        $john = $this->getTestUser('john@kolab.org');
+
+        if (!$john->isDegraded()) {
+            $john->status |= User::STATUS_DEGRADED;
+            User::where('id', $john->id)->update(['status' => $john->status]);
+        }
+
+        $this->clearBetaEntitlements();
+        $this->clearMeetEntitlements();
+    }
+
+    /**
+     * {@inheritDoc}
+     */
+    public function tearDown(): void
+    {
+        $john = $this->getTestUser('john@kolab.org');
+
+        if ($john->isDegraded()) {
+            $john->status ^= User::STATUS_DEGRADED;
+            User::where('id', $john->id)->update(['status' => $john->status]);
+        }
+
+        $this->clearBetaEntitlements();
+        $this->clearMeetEntitlements();
+
+        parent::tearDown();
+    }
+
+    /**
+     * Test acting as an owner of a degraded account
+     */
+    public function testDegradedAccountOwner(): void
+    {
+        $this->browse(function (Browser $browser) {
+            $browser->visit(new Home())
+                ->submitLogon('john@kolab.org', 'simple123', true)
+                ->on(new Dashboard())
+                ->assertSeeIn('#status-degraded p.alert', 'The account is degraded')
+                ->assertSeeIn('#status-degraded p.alert', 'Please, make a payment');
+
+            // Goto /users and assert that the warning is also displayed there
+            $browser->visit(new UserList())
+                ->assertSeeIn('#status-degraded p.alert', 'The account is degraded')
+                ->assertSeeIn('#status-degraded p.alert', 'Please, make a payment')
+                ->whenAvailable('@table', function (Browser $browser) {
+                    $browser->waitFor('tbody tr')
+                        ->assertVisible('tbody tr:nth-child(1) td:first-child svg.text-warning') // Jack
+                        ->assertText('tbody tr:nth-child(2) td:first-child svg.text-warning title', 'Degraded')
+                        ->assertVisible('tbody tr:nth-child(3) td:first-child svg.text-warning') // John
+                        ->assertText('tbody tr:nth-child(3) td:first-child svg.text-warning title', 'Degraded');
+                });
+
+            // Test that /rooms is not accessible
+            $browser->visit('/rooms')
+                ->waitFor('#app > #error-page')
+                ->assertSeeIn('#error-page .code', '403');
+        });
+    }
+
+    /**
+     * Test acting as non-owner of a degraded account
+     */
+    public function testDegradedAccountUser(): void
+    {
+        $this->browse(function (Browser $browser) {
+            $browser->visit(new Home())
+                ->submitLogon('jack@kolab.org', 'simple123', true)
+                ->on(new Dashboard())
+                ->assertSeeIn('#status-degraded p.alert', 'The account is degraded')
+                ->assertDontSeeIn('#status-degraded p.alert', 'Please, make a payment');
+        });
+    }
+}
diff --git a/src/tests/Feature/Backends/LDAPTest.php b/src/tests/Feature/Backends/LDAPTest.php
--- a/src/tests/Feature/Backends/LDAPTest.php
+++ b/src/tests/Feature/Backends/LDAPTest.php
@@ -302,6 +302,32 @@
 
         $this->assertSame($expected_roles, $ldap_roles);
 
+        // Test degraded user
+
+        $sku_storage = \App\Sku::withEnvTenantContext()->where('title', 'storage')->first();
+        $sku_2fa = \App\Sku::withEnvTenantContext()->where('title', '2fa')->first();
+        $user->status |= User::STATUS_DEGRADED;
+        $user->update(['status' => $user->status]);
+        $user->assignSku($sku_storage, 2);
+        $user->assignSku($sku_2fa, 1);
+
+        LDAP::updateUser($user->fresh());
+
+        $expected['inetuserstatus'] = $user->status;
+        $expected['mailquota'] = \config('app.storage.min_qty') * 1048576;
+        $expected['nsroledn'] = [
+            'cn=2fa-user,' . \config('ldap.hosted.root_dn'),
+            'cn=degraded-user,' . \config('ldap.hosted.root_dn')
+        ];
+
+        $ldap_user = LDAP::getUser($user->email);
+
+        foreach ($expected as $attr => $value) {
+            $this->assertEquals($value, isset($ldap_user[$attr]) ? $ldap_user[$attr] : null);
+        }
+
+        // TODO: Test user who's owner is degraded
+
         // Delete the user
         LDAP::deleteUser($user);
 
diff --git a/src/tests/Feature/Console/User/DegradeTest.php b/src/tests/Feature/Console/User/DegradeTest.php
new file mode 100644
--- /dev/null
+++ b/src/tests/Feature/Console/User/DegradeTest.php
@@ -0,0 +1,56 @@
+<?php
+
+namespace Tests\Feature\Console\User;
+
+use Illuminate\Support\Facades\Queue;
+use Tests\TestCase;
+
+class DegradeTest extends TestCase
+{
+    /**
+     * {@inheritDoc}
+     */
+    public function setUp(): void
+    {
+        parent::setUp();
+
+        $this->deleteTestUser('user-degrade-test@kolabnow.com');
+    }
+
+    /**
+     * {@inheritDoc}
+     */
+    public function tearDown(): void
+    {
+        $this->deleteTestUser('user-degrade-test@kolabnow.com');
+
+        parent::tearDown();
+    }
+
+    /**
+     * Test the command
+     */
+    public function testHandle(): void
+    {
+        Queue::fake();
+
+        // Non-existing user
+        $code = \Artisan::call("user:degrade unknown@unknown.org");
+        $output = trim(\Artisan::output());
+
+        $this->assertSame(1, $code);
+        $this->assertSame("User not found.", $output);
+
+        // Create a user account for degrade
+        $user = $this->getTestUser('user-degrade-test@kolabnow.com');
+
+        $code = \Artisan::call("user:degrade {$user->email}");
+        $output = trim(\Artisan::output());
+
+        $user->refresh();
+
+        $this->assertTrue($user->isDegraded());
+        $this->assertSame('', $output);
+        $this->assertSame(0, $code);
+    }
+}
diff --git a/src/tests/Feature/Console/User/UndegradeTest.php b/src/tests/Feature/Console/User/UndegradeTest.php
new file mode 100644
--- /dev/null
+++ b/src/tests/Feature/Console/User/UndegradeTest.php
@@ -0,0 +1,58 @@
+<?php
+
+namespace Tests\Feature\Console\User;
+
+use Illuminate\Support\Facades\Queue;
+use Tests\TestCase;
+
+class UndegradeTest extends TestCase
+{
+    /**
+     * {@inheritDoc}
+     */
+    public function setUp(): void
+    {
+        parent::setUp();
+
+        $this->deleteTestUser('user-degrade-test@kolabnow.com');
+    }
+
+    /**
+     * {@inheritDoc}
+     */
+    public function tearDown(): void
+    {
+        $this->deleteTestUser('user-degrade-test@kolabnow.com');
+
+        parent::tearDown();
+    }
+
+    /**
+     * Test the command
+     */
+    public function testHandle(): void
+    {
+        Queue::fake();
+
+        // Non-existing user
+        $code = \Artisan::call("user:undegrade unknown@unknown.org");
+        $output = trim(\Artisan::output());
+
+        $this->assertSame(1, $code);
+        $this->assertSame("User not found.", $output);
+
+        // Create a user account for degrade/undegrade
+        $user = $this->getTestUser('user-degrade-test@kolabnow.com', ['status' => \App\User::STATUS_DEGRADED]);
+
+        $this->assertTrue($user->isDegraded());
+
+        $code = \Artisan::call("user:undegrade {$user->email}");
+        $output = trim(\Artisan::output());
+
+        $user->refresh();
+
+        $this->assertFalse($user->isDegraded());
+        $this->assertSame('', $output);
+        $this->assertSame(0, $code);
+    }
+}
diff --git a/src/tests/Feature/Controller/UsersTest.php b/src/tests/Feature/Controller/UsersTest.php
--- a/src/tests/Feature/Controller/UsersTest.php
+++ b/src/tests/Feature/Controller/UsersTest.php
@@ -210,6 +210,8 @@
         $this->assertSame($ned->email, $json[3]['email']);
         // Values below are tested by Unit tests
         $this->assertArrayHasKey('isDeleted', $json[0]);
+        $this->assertArrayHasKey('isDegraded', $json[0]);
+        $this->assertArrayHasKey('isAccountDegraded', $json[0]);
         $this->assertArrayHasKey('isSuspended', $json[0]);
         $this->assertArrayHasKey('isActive', $json[0]);
         $this->assertArrayHasKey('isLdapReady', $json[0]);
@@ -249,6 +251,8 @@
         $this->assertSame([], $json['skus']);
         // Values below are tested by Unit tests
         $this->assertArrayHasKey('isDeleted', $json);
+        $this->assertArrayHasKey('isDegraded', $json);
+        $this->assertArrayHasKey('isAccountDegraded', $json);
         $this->assertArrayHasKey('isSuspended', $json);
         $this->assertArrayHasKey('isActive', $json);
         $this->assertArrayHasKey('isLdapReady', $json);
diff --git a/src/tests/Feature/EntitlementTest.php b/src/tests/Feature/EntitlementTest.php
--- a/src/tests/Feature/EntitlementTest.php
+++ b/src/tests/Feature/EntitlementTest.php
@@ -130,6 +130,71 @@
         $this->assertTrue($entitlement->entitleable instanceof \App\User);
     }
 
+    /**
+     * @todo This really should be in User or Wallet tests file
+     */
+    public function testBillDeletedEntitlement(): void
+    {
+        $user = $this->getTestUser('entitlement-test@kolabnow.com');
+        $package = \App\Package::withEnvTenantContext()->where('title', 'kolab')->first();
+        $storage = \App\Sku::withEnvTenantContext()->where('title', 'storage')->first();
+
+        $user->assignPackage($package);
+        // some additional SKUs so we have something to delete.
+        $user->assignSku($storage, 4);
+
+        // the mailbox, the groupware, the 5 original storage and the additional 4
+        $this->assertCount(11, $user->fresh()->entitlements);
+
+        $wallet = $user->wallets()->first();
+
+        $backdate = Carbon::now()->subWeeks(7);
+        $this->backdateEntitlements($user->entitlements, $backdate);
+
+        $charge = $wallet->chargeEntitlements();
+
+        $this->assertSame(-1090, $wallet->balance);
+
+        $balance = $wallet->balance;
+        $discount = \App\Discount::withEnvTenantContext()->where('discount', 30)->first();
+        $wallet->discount()->associate($discount);
+        $wallet->save();
+
+        $user->removeSku($storage, 4);
+
+        // we expect the wallet to have been charged for ~3 weeks of use of
+        // 4 deleted storage entitlements, it should also take discount into account
+        $backdate->addMonthsWithoutOverflow(1);
+        $diffInDays = $backdate->diffInDays(Carbon::now());
+
+        // entitlements-num * cost * discount * days-in-month
+        $max = intval(4 * 25 * 0.7 * $diffInDays / 28);
+        $min = intval(4 * 25 * 0.7 * $diffInDays / 31);
+
+        $wallet->refresh();
+        $this->assertTrue($wallet->balance >= $balance - $max);
+        $this->assertTrue($wallet->balance <= $balance - $min);
+
+        $transactions = \App\Transaction::where('object_id', $wallet->id)
+            ->where('object_type', \App\Wallet::class)->get();
+
+        // one round of the monthly invoicing, four sku deletions getting invoiced
+        $this->assertCount(5, $transactions);
+
+        // Test that deleting an entitlement on a degraded account costs nothing
+        $balance = $wallet->balance;
+        User::where('id', $user->id)->update(['status' => $user->status | User::STATUS_DEGRADED]);
+
+        $backdate = Carbon::now()->subWeeks(7);
+        $this->backdateEntitlements($user->entitlements()->get(), $backdate);
+
+        $groupware = \App\Sku::withEnvTenantContext()->where('title', 'groupware')->first();
+        $entitlement = $wallet->entitlements()->where('sku_id', $groupware->id)->first();
+        $entitlement->delete();
+
+        $this->assertSame($wallet->refresh()->balance, $balance);
+    }
+
     /**
      * Test Entitlement::entitlementTitle()
      */
diff --git a/src/tests/Feature/Jobs/WalletCheckTest.php b/src/tests/Feature/Jobs/WalletCheckTest.php
--- a/src/tests/Feature/Jobs/WalletCheckTest.php
+++ b/src/tests/Feature/Jobs/WalletCheckTest.php
@@ -4,6 +4,7 @@
 
 use App\Jobs\WalletCheck;
 use App\User;
+use App\Wallet;
 use Carbon\Carbon;
 use Illuminate\Support\Facades\Mail;
 use Tests\TestCase;
@@ -17,12 +18,6 @@
     {
         parent::setUp();
 
-        $ned = $this->getTestUser('ned@kolab.org');
-        if ($ned->isSuspended()) {
-            $ned->status -= User::STATUS_SUSPENDED;
-            $ned->save();
-        }
-
         $this->deleteTestUser('wallet-check@kolabnow.com');
     }
 
@@ -31,12 +26,6 @@
      */
     public function tearDown(): void
     {
-        $ned = $this->getTestUser('ned@kolab.org');
-        if ($ned->isSuspended()) {
-            $ned->status -= User::STATUS_SUSPENDED;
-            $ned->save();
-        }
-
         $this->deleteTestUser('wallet-check@kolabnow.com');
 
         parent::tearDown();
@@ -49,14 +38,9 @@
     {
         Mail::fake();
 
-        $user = $this->getTestUser('ned@kolab.org');
-        $user->setSetting('external_email', 'external@test.com');
-        $wallet = $user->wallets()->first();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
-        // Balance is not negative, double-update+save for proper resetting of the state
-        $wallet->balance = -100;
-        $wallet->save();
         $wallet->balance = 0;
         $wallet->save();
 
@@ -123,8 +107,7 @@
     {
         Mail::fake();
 
-        $user = $this->getTestUser('ned@kolab.org');
-        $wallet = $user->wallets()->first();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
         // Balance turned negative 7-1 days ago
@@ -149,9 +132,7 @@
     {
         Mail::fake();
 
-        $user = $this->getTestUser('ned@kolab.org');
-        $user->setSetting('external_email', 'external@test.com');
-        $wallet = $user->wallets()->first();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
         // Balance turned negative 7+1 days ago, expect mail sent
@@ -160,10 +141,10 @@
         $job = new WalletCheck($wallet);
         $job->handle();
 
-        // Assert the mail was sent to the user's email, but not to his external email
-        Mail::assertSent(\App\Mail\NegativeBalanceReminder::class, 1);
-        Mail::assertSent(\App\Mail\NegativeBalanceReminder::class, function ($mail) use ($user) {
-            return $mail->hasTo($user->email) && !$mail->hasCc('external@test.com');
+        // Assert the mail was sent to the user's email and to his external email
+        Mail::assertSent(\App\Mail\NegativeBalanceReminderDegrade::class, 1);
+        Mail::assertSent(\App\Mail\NegativeBalanceReminderDegrade::class, function ($mail) use ($user) {
+            return $mail->hasTo($user->email) && $mail->hasCc('external@test.com');
         });
 
         // Run the job again to make sure the notification is not sent again
@@ -179,12 +160,12 @@
      *
      * @depends testHandleReminder
      */
+/*
     public function testHandleBeforeSuspended(): void
     {
         Mail::fake();
 
-        $user = $this->getTestUser('ned@kolab.org');
-        $wallet = $user->wallets()->first();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
         // Balance turned negative 7+14-1 days ago
@@ -200,19 +181,18 @@
         $this->assertSame(WalletCheck::THRESHOLD_BEFORE_SUSPEND, $res);
         $this->assertFalse($user->fresh()->isSuspended());
     }
-
+*/
     /**
      * Test job handle, account suspending
      *
      * @depends testHandleBeforeSuspended
      */
+/*
     public function testHandleSuspended(): void
     {
         Mail::fake();
 
-        $user = $this->getTestUser('ned@kolab.org');
-        $user->setSetting('external_email', 'external@test.com');
-        $wallet = $user->wallets()->first();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
         // Balance turned negative 7+14+1 days ago, expect mail sent
@@ -232,16 +212,6 @@
         $this->assertTrue($user->fresh()->isSuspended());
 
         // TODO: Test that group account members/domain are also being suspended
-        /*
-        foreach ($wallet->entitlements()->fresh()->get() as $entitlement) {
-            if (
-                $entitlement->entitleable_type == \App\Domain::class
-                || $entitlement->entitleable_type == \App\User::class
-            ) {
-                $this->assertTrue($entitlement->entitleable->isSuspended());
-            }
-        }
-        */
 
         // Run the job again to make sure the notification is not sent again
         Mail::fake();
@@ -250,19 +220,18 @@
 
         Mail::assertNothingSent();
     }
-
+*/
     /**
      * Test job handle, final warning before delete
      *
      * @depends testHandleSuspended
      */
+/*
     public function testHandleBeforeDelete(): void
     {
         Mail::fake();
 
-        $user = $this->getTestUser('ned@kolab.org');
-        $user->setSetting('external_email', 'external@test.com');
-        $wallet = $user->wallets()->first();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
         // Balance turned negative 7+14+21-3+1 days ago, expect mail sent
@@ -288,25 +257,20 @@
 
         Mail::assertNothingSent();
     }
-
+*/
     /**
      * Test job handle, account delete
      *
      * @depends testHandleBeforeDelete
      */
+/*
     public function testHandleDelete(): void
     {
         Mail::fake();
 
-        $user = $this->getTestUser('wallet-check@kolabnow.com');
-        $wallet = $user->wallets()->first();
-        $wallet->balance = -100;
-        $wallet->save();
+        $user = $this->prepareTestUser($wallet);
         $now = Carbon::now();
 
-        $package = \App\Package::withEnvTenantContext()->where('title', 'kolab')->first();
-        $user->assignPackage($package);
-
         $this->assertFalse($user->isDeleted());
         $this->assertCount(7, $user->entitlements()->get());
 
@@ -325,4 +289,111 @@
 
         // TODO: Test it deletes all members of the group account
     }
+*/
+
+    /**
+     * Test job handle, account degrade
+     *
+     * @depends testHandleReminder
+     */
+    public function testHandleDegrade(): void
+    {
+        Mail::fake();
+
+        $user = $this->prepareTestUser($wallet);
+        $now = Carbon::now();
+
+        $this->assertFalse($user->isDegraded());
+
+        // Balance turned negative 7+7+1 days ago, expect mail sent
+        $days = 7 + 7 + 1;
+        $wallet->setSetting('balance_negative_since', $now->subDays($days)->toDateTimeString());
+
+        $job = new WalletCheck($wallet);
+        $job->handle();
+
+        // Assert the mail was sent to the user's email, and his external email
+        Mail::assertSent(\App\Mail\NegativeBalanceDegraded::class, 1);
+        Mail::assertSent(\App\Mail\NegativeBalanceDegraded::class, function ($mail) use ($user) {
+            return $mail->hasTo($user->email) && $mail->hasCc('external@test.com');
+        });
+
+        // Check that it has been degraded
+        $this->assertTrue($user->fresh()->isDegraded());
+    }
+
+    /**
+     * Test job handle, periodic reminder to a degraded account
+     *
+     * @depends testHandleDegrade
+     */
+    public function testHandleDegradeReminder(): void
+    {
+        Mail::fake();
+
+        $user = $this->prepareTestUser($wallet);
+        $user->update(['status' => $user->status | User::STATUS_DEGRADED]);
+        $now = Carbon::now();
+
+        $this->assertTrue($user->isDegraded());
+
+        // Test degraded_last_reminder not set
+        $wallet->setSetting('degraded_last_reminder', null);
+
+        $job = new WalletCheck($wallet);
+        $res = $job->handle();
+
+        Mail::assertNothingSent();
+
+        $_last = Wallet::find($wallet->id)->getSetting('degraded_last_reminder');
+        $this->assertSame(Carbon::now()->toDateTimeString(), $_last);
+        $this->assertSame(WalletCheck::THRESHOLD_DEGRADE_REMINDER, $res);
+
+        // Test degraded_last_reminder set, but 14 days didn't pass yet
+        $last = $now->copy()->subDays(10);
+        $wallet->setSetting('degraded_last_reminder', $last->toDateTimeString());
+
+        $job = new WalletCheck($wallet);
+        $res = $job->handle();
+
+        Mail::assertNothingSent();
+
+        $_last = $wallet->fresh()->getSetting('degraded_last_reminder');
+        $this->assertSame(WalletCheck::THRESHOLD_DEGRADE_REMINDER, $res);
+        $this->assertSame($last->toDateTimeString(), $_last);
+
+        // Test degraded_last_reminder set, and 14 days passed
+        $wallet->setSetting('degraded_last_reminder', $now->copy()->subDays(14)->setSeconds(0));
+
+        $job = new WalletCheck($wallet);
+        $res = $job->handle();
+
+        // Assert the mail was sent to the user's email, and his external email
+        Mail::assertSent(\App\Mail\DegradedAccountReminder::class, 1);
+        Mail::assertSent(\App\Mail\DegradedAccountReminder::class, function ($mail) use ($user) {
+            return $mail->hasTo($user->email) && $mail->hasCc('external@test.com');
+        });
+
+        $_last = $wallet->fresh()->getSetting('degraded_last_reminder');
+        $this->assertSame(Carbon::now()->toDateTimeString(), $_last);
+        $this->assertSame(WalletCheck::THRESHOLD_DEGRADE_REMINDER, $res);
+    }
+
+    /**
+     * A helper to prepare a user for tests
+     */
+    private function prepareTestUser(&$wallet)
+    {
+        $user = $this->getTestUser('wallet-check@kolabnow.com');
+        $user->setSetting('external_email', 'external@test.com');
+        $wallet = $user->wallets()->first();
+
+        $package = \App\Package::withObjectTenantContext($user)->where('title', 'kolab')->first();
+        $user->assignPackage($package);
+
+        $wallet->balance = -100;
+        $wallet->save();
+
+        return $user;
+    }
 }
diff --git a/src/tests/Feature/UserTest.php b/src/tests/Feature/UserTest.php
--- a/src/tests/Feature/UserTest.php
+++ b/src/tests/Feature/UserTest.php
@@ -5,6 +5,7 @@
 use App\Domain;
 use App\Group;
 use App\User;
+use Carbon\Carbon;
 use Illuminate\Support\Facades\Queue;
 use Tests\TestCase;
 
@@ -328,36 +329,99 @@
     }
 
     /**
-     * Test User::hasSku() method
+     * Test user account degradation and un-degradation
      */
-    public function testHasSku(): void
+    public function testDegradeAndUndegrade(): void
     {
-        $john = $this->getTestUser('john@kolab.org');
+        Queue::fake();
 
-        $this->assertTrue($john->hasSku('mailbox'));
-        $this->assertTrue($john->hasSku('storage'));
-        $this->assertFalse($john->hasSku('beta'));
-        $this->assertFalse($john->hasSku('unknown'));
-    }
+        // Test an account with users, domain
+        $userA = $this->getTestUser('UserAccountA@UserAccount.com');
+        $userB = $this->getTestUser('UserAccountB@UserAccount.com');
+        $package_kolab = \App\Package::withEnvTenantContext()->where('title', 'kolab')->first();
+        $package_domain = \App\Package::withEnvTenantContext()->where('title', 'domain-hosting')->first();
+        $domain = $this->getTestDomain('UserAccount.com', [
+                'status' => Domain::STATUS_NEW,
+                'type' => Domain::TYPE_HOSTED,
+        ]);
+        $userA->assignPackage($package_kolab);
+        $domain->assignPackage($package_domain, $userA);
+        $userA->assignPackage($package_kolab, $userB);
 
-    public function testUserQuota(): void
-    {
-        // TODO: This test does not test much, probably could be removed
-        //       or moved to somewhere else, or extended with
-        //       other entitlements() related cases.
+        $entitlementsA = \App\Entitlement::where('entitleable_id', $userA->id);
+        $entitlementsB = \App\Entitlement::where('entitleable_id', $userB->id);
+        $entitlementsDomain = \App\Entitlement::where('entitleable_id', $domain->id);
 
-        $user = $this->getTestUser('john@kolab.org');
-        $storage_sku = \App\Sku::withEnvTenantContext()->where('title', 'storage')->first();
+        $yesterday = Carbon::now()->subDays(1);
 
-        $count = 0;
+        $this->backdateEntitlements($entitlementsA->get(), $yesterday, Carbon::now()->subMonthsWithoutOverflow(1));
+        $this->backdateEntitlements($entitlementsB->get(), $yesterday, Carbon::now()->subMonthsWithoutOverflow(1));
 
-        foreach ($user->entitlements()->get() as $entitlement) {
-            if ($entitlement->sku_id == $storage_sku->id) {
-                $count += 1;
-            }
-        }
+        $wallet = $userA->wallets->first();
+
+        $this->assertSame(7, $entitlementsA->count());
+        $this->assertSame(7, $entitlementsB->count());
+        $this->assertSame(7, $entitlementsA->whereDate('updated_at', $yesterday->toDateString())->count());
+        $this->assertSame(7, $entitlementsB->whereDate('updated_at', $yesterday->toDateString())->count());
+        $this->assertSame(0, $wallet->balance);
+
+        Queue::fake(); // reset queue state
 
-        $this->assertTrue($count == 5);
+        // Degrade the account/wallet owner
+        $userA->degrade();
+
+        $entitlementsA = \App\Entitlement::where('entitleable_id', $userA->id);
+        $entitlementsB = \App\Entitlement::where('entitleable_id', $userB->id);
+
+        $this->assertTrue($userA->fresh()->isDegraded());
+        $this->assertTrue($userA->fresh()->isDegraded(true));
+        $this->assertFalse($userB->fresh()->isDegraded());
+        $this->assertTrue($userB->fresh()->isDegraded(true));
+
+        $balance = $wallet->fresh()->balance;
+        $this->assertTrue($balance <= -64);
+        $this->assertSame(7, $entitlementsA->whereDate('updated_at', Carbon::now()->toDateString())->count());
+        $this->assertSame(7, $entitlementsB->whereDate('updated_at', Carbon::now()->toDateString())->count());
+
+        // Expect one update job for every user
+        // @phpstan-ignore-next-line
+        $userIds = Queue::pushed(\App\Jobs\User\UpdateJob::class)->map(function ($job) {
+            return TestCase::getObjectProperty($job, 'userId');
+        })->all();
+
+        $this->assertSame([$userA->id, $userB->id], $userIds);
+
+        // Un-Degrade the account/wallet owner
+
+        $entitlementsA = \App\Entitlement::where('entitleable_id', $userA->id);
+        $entitlementsB = \App\Entitlement::where('entitleable_id', $userB->id);
+
+        $yesterday = Carbon::now()->subDays(1);
+
+        $this->backdateEntitlements($entitlementsA->get(), $yesterday, Carbon::now()->subMonthsWithoutOverflow(1));
+        $this->backdateEntitlements($entitlementsB->get(), $yesterday, Carbon::now()->subMonthsWithoutOverflow(1));
+
+        Queue::fake(); // reset queue state
+
+        $userA->undegrade();
+
+        $this->assertFalse($userA->fresh()->isDegraded());
+        $this->assertFalse($userA->fresh()->isDegraded(true));
+        $this->assertFalse($userB->fresh()->isDegraded());
+        $this->assertFalse($userB->fresh()->isDegraded(true));
+
+        // Expect no balance change, degraded account entitlements are free
+        $this->assertSame($balance, $wallet->fresh()->balance);
+        $this->assertSame(7, $entitlementsA->whereDate('updated_at', Carbon::now()->toDateString())->count());
+        $this->assertSame(7, $entitlementsB->whereDate('updated_at', Carbon::now()->toDateString())->count());
+
+        // Expect one update job for every user
+        // @phpstan-ignore-next-line
+        $userIds = Queue::pushed(\App\Jobs\User\UpdateJob::class)->map(function ($job) {
+            return TestCase::getObjectProperty($job, 'userId');
+        })->all();
+
+        $this->assertSame([$userA->id, $userB->id], $userIds);
     }
 
     /**
@@ -587,6 +651,19 @@
         $this->markTestIncomplete();
     }
 
+    /**
+     * Test User::hasSku() method
+     */
+    public function testHasSku(): void
+    {
+        $john = $this->getTestUser('john@kolab.org');
+
+        $this->assertTrue($john->hasSku('mailbox'));
+        $this->assertTrue($john->hasSku('storage'));
+        $this->assertFalse($john->hasSku('beta'));
+        $this->assertFalse($john->hasSku('unknown'));
+    }
+
     /**
      * Test User::name()
      */
@@ -902,6 +979,9 @@
         $this->assertCount(4, $users);
     }
 
+    /**
+     * Tests for User::wallets()
+     */
     public function testWallets(): void
     {
         $this->markTestIncomplete();
diff --git a/src/tests/Feature/WalletTest.php b/src/tests/Feature/WalletTest.php
--- a/src/tests/Feature/WalletTest.php
+++ b/src/tests/Feature/WalletTest.php
@@ -9,6 +9,7 @@
 use App\Wallet;
 use Carbon\Carbon;
 use Illuminate\Support\Facades\DB;
+use Illuminate\Support\Facades\Queue;
 use Tests\TestCase;
 
 class WalletTest extends TestCase
@@ -48,27 +49,34 @@
 
     /**
      * Test that turning wallet balance from negative to positive
-     * unsuspends the account
+     * unsuspends and undegrades the account
      */
-    public function testBalancePositiveUnsuspend(): void
+    public function testBalanceTurnsPositive(): void
     {
+        Queue::fake();
+
         $user = $this->getTestUser('UserWallet1@UserWallet.com');
         $user->suspend();
+        $user->degrade();
 
         $wallet = $user->wallets()->first();
         $wallet->balance = -100;
         $wallet->save();
 
         $this->assertTrue($user->isSuspended());
+        $this->assertTrue($user->isDegraded());
         $this->assertNotNull($wallet->getSetting('balance_negative_since'));
 
         $wallet->balance = 100;
         $wallet->save();
 
-        $this->assertFalse($user->fresh()->isSuspended());
+        $user->refresh();
+
+        $this->assertFalse($user->isSuspended());
+        $this->assertFalse($user->isDegraded());
         $this->assertNull($wallet->getSetting('balance_negative_since'));
 
-        // TODO: Test group account and unsuspending domain/members
+        // TODO: Test group account and unsuspending domain/members/groups
     }
 
     /**
@@ -403,4 +411,12 @@
 
         // TODO: Test entitlement transaction records
     }
+
+    /**
+     * Tests for updateEntitlements()
+     */
+    public function testUpdateEntitlements(): void
+    {
+        $this->markTestIncomplete();
+    }
 }
diff --git a/src/tests/TestCaseTrait.php b/src/tests/TestCaseTrait.php
--- a/src/tests/TestCaseTrait.php
+++ b/src/tests/TestCaseTrait.php
@@ -109,7 +109,7 @@
         Assert::assertSame($expected, $skus);
     }
 
-    protected function backdateEntitlements($entitlements, $targetDate)
+    protected function backdateEntitlements($entitlements, $targetDate, $targetCreatedDate = null)
     {
         $wallets = [];
         $ids = [];
@@ -120,7 +120,7 @@
         }
 
         \App\Entitlement::whereIn('id', $ids)->update([
-                'created_at' => $targetDate,
+                'created_at' => $targetCreatedDate ?: $targetDate,
                 'updated_at' => $targetDate,
         ]);
 
@@ -128,7 +128,9 @@
             $wallets = array_unique($wallets);
             $owners = \App\Wallet::whereIn('id', $wallets)->pluck('user_id')->all();
 
-            \App\User::whereIn('id', $owners)->update(['created_at' => $targetDate]);
+            \App\User::whereIn('id', $owners)->update([
+                    'created_at' => $targetCreatedDate ?: $targetDate
+            ]);
         }
     }
 
diff --git a/src/tests/Unit/Mail/DegradedAccountReminderTest.php b/src/tests/Unit/Mail/DegradedAccountReminderTest.php
new file mode 100644
--- /dev/null
+++ b/src/tests/Unit/Mail/DegradedAccountReminderTest.php
@@ -0,0 +1,45 @@
+<?php
+
+namespace Tests\Unit\Mail;
+
+use App\Mail\DegradedAccountReminder;
+use App\User;
+use App\Wallet;
+use Tests\MailInterceptTrait;
+use Tests\TestCase;
+
+class DegradedAccountReminderTest extends TestCase
+{
+    use MailInterceptTrait;
+
+    /**
+     * Test email content
+     */
+    public function testBuild(): void
+    {
+        $user = $this->getTestUser('ned@kolab.org');
+        $wallet = $user->wallets->first();
+
+        $mail = $this->fakeMail(new DegradedAccountReminder($wallet, $user));
+
+        $html = $mail['html'];
+        $plain = $mail['plain'];
+
+        $dashboardUrl = \App\Utils::serviceUrl('/dashboard');
+        $dashboardLink = sprintf('<a href="%s">%s</a>', $dashboardUrl, $dashboardUrl);
+        $appName = $user->tenant->title;
+
+        $this->assertMailSubject("$appName Reminder: Your account is free", $mail['message']);
+
+        $this->assertStringStartsWith('<!DOCTYPE html>', $html);
+        $this->assertTrue(strpos($html, $user->name(true)) > 0);
+        $this->assertTrue(strpos($html, $dashboardLink) > 0);
+        $this->assertTrue(strpos($html, "your account is a free account") > 0);
+        $this->assertTrue(strpos($html, "$appName Team") > 0);
+
+        $this->assertStringStartsWith('Dear ' . $user->name(true), $plain);
+        $this->assertTrue(strpos($plain, $dashboardUrl) > 0);
+        $this->assertTrue(strpos($plain, "your account is a free account") > 0);
+        $this->assertTrue(strpos($plain, "$appName Team") > 0);
+    }
+}
diff --git a/src/tests/Unit/Mail/NegativeBalanceDegradedTest.php b/src/tests/Unit/Mail/NegativeBalanceDegradedTest.php
new file mode 100644
--- /dev/null
+++ b/src/tests/Unit/Mail/NegativeBalanceDegradedTest.php
@@ -0,0 +1,58 @@
+<?php
+
+namespace Tests\Unit\Mail;
+
+use App\Jobs\WalletCheck;
+use App\Mail\NegativeBalanceDegraded;
+use App\User;
+use App\Wallet;
+use Tests\MailInterceptTrait;
+use Tests\TestCase;
+
+class NegativeBalanceDegradedTest extends TestCase
+{
+    use MailInterceptTrait;
+
+    /**
+     * Test email content
+     */
+    public function testBuild(): void
+    {
+        $user = $this->getTestUser('ned@kolab.org');
+        $wallet = $user->wallets->first();
+        $wallet->balance = -100;
+        $wallet->save();
+
+        \config([
+                'app.support_url' => 'https://kolab.org/support',
+        ]);
+
+        $mail = $this->fakeMail(new NegativeBalanceDegraded($wallet, $user));
+
+        $html = $mail['html'];
+        $plain = $mail['plain'];
+
+        $walletUrl = \App\Utils::serviceUrl('/wallet');
+        $walletLink = sprintf('<a href="%s">%s</a>', $walletUrl, $walletUrl);
+        $supportUrl = \config('app.support_url');
+        $supportLink = sprintf('<a href="%s">%s</a>', $supportUrl, $supportUrl);
+        $appName = $user->tenant->title;
+
+        $this->assertMailSubject("$appName Account Degraded", $mail['message']);
+
+        $this->assertStringStartsWith('<!DOCTYPE html>', $html);
+        $this->assertTrue(strpos($html, $user->name(true)) > 0);
+        $this->assertTrue(strpos($html, $walletLink) > 0);
+        $this->assertTrue(strpos($html, $supportLink) > 0);
+        $this->assertTrue(strpos($html, "Your $appName account has been degraded") > 0);
+        $this->assertTrue(strpos($html, "$appName Support") > 0);
+        $this->assertTrue(strpos($html, "$appName Team") > 0);
+
+        $this->assertStringStartsWith('Dear ' . $user->name(true), $plain);
+        $this->assertTrue(strpos($plain, $walletUrl) > 0);
+        $this->assertTrue(strpos($plain, $supportUrl) > 0);
+        $this->assertTrue(strpos($plain, "Your $appName account has been degraded") > 0);
+        $this->assertTrue(strpos($plain, "$appName Support") > 0);
+        $this->assertTrue(strpos($plain, "$appName Team") > 0);
+    }
+}
diff --git a/src/tests/Unit/Mail/NegativeBalanceReminderDegradeTest.php b/src/tests/Unit/Mail/NegativeBalanceReminderDegradeTest.php
new file mode 100644
--- /dev/null
+++ b/src/tests/Unit/Mail/NegativeBalanceReminderDegradeTest.php
@@ -0,0 +1,64 @@
+<?php
+
+namespace Tests\Unit\Mail;
+
+use App\Jobs\WalletCheck;
+use App\Mail\NegativeBalanceReminderDegrade;
+use App\User;
+use App\Wallet;
+use Tests\MailInterceptTrait;
+use Tests\TestCase;
+
+class NegativeBalanceReminderDegradeTest extends TestCase
+{
+    use MailInterceptTrait;
+
+    /**
+     * Test email content
+     */
+    public function testBuild(): void
+    {
+        $user = $this->getTestUser('ned@kolab.org');
+        $wallet = $user->wallets->first();
+        $wallet->balance = -100;
+        $wallet->save();
+
+        $threshold = WalletCheck::threshold($wallet, WalletCheck::THRESHOLD_DEGRADE);
+
+        \config([
+                'app.support_url' => 'https://kolab.org/support',
+        ]);
+
+        $mail = $this->fakeMail(new NegativeBalanceReminderDegrade($wallet, $user));
+
+        $html = $mail['html'];
+        $plain = $mail['plain'];
+
+        $walletUrl = \App\Utils::serviceUrl('/wallet');
+        $walletLink = sprintf('<a href="%s">%s</a>', $walletUrl, $walletUrl);
+        $supportUrl = \config('app.support_url');
+        $supportLink = sprintf('<a href="%s">%s</a>', $supportUrl, $supportUrl);
+        $appName = $user->tenant->title;
+
+        $this->assertMailSubject("$appName Payment Reminder", $mail['message']);
+
+        $this->assertStringStartsWith('<!DOCTYPE html>', $html);
+        $this->assertTrue(strpos($html, $user->name(true)) > 0);
+        $this->assertTrue(strpos($html, $walletLink) > 0);
+        $this->assertTrue(strpos($html, $supportLink) > 0);
+        $this->assertTrue(strpos($html, "you are behind on paying for your $appName account") > 0);
+        $this->assertTrue(strpos($html, "your account will be degraded") > 0);
+        $this->assertTrue(strpos($html, $threshold->toDateString()) > 0);
+        $this->assertTrue(strpos($html, "$appName Support") > 0);
+        $this->assertTrue(strpos($html, "$appName Team") > 0);
+
+        $this->assertStringStartsWith('Dear ' . $user->name(true), $plain);
+        $this->assertTrue(strpos($plain, $walletUrl) > 0);
+        $this->assertTrue(strpos($plain, $supportUrl) > 0);
+        $this->assertTrue(strpos($plain, "you are behind on paying for your $appName account") > 0);
+        $this->assertTrue(strpos($plain, "your account will be degraded") > 0);
+        $this->assertTrue(strpos($plain, $threshold->toDateString()) > 0);
+        $this->assertTrue(strpos($plain, "$appName Support") > 0);
+        $this->assertTrue(strpos($plain, "$appName Team") > 0);
+    }
+}
diff --git a/src/tests/Unit/UserTest.php b/src/tests/Unit/UserTest.php
--- a/src/tests/Unit/UserTest.php
+++ b/src/tests/Unit/UserTest.php
@@ -3,6 +3,7 @@
 namespace Tests\Unit;
 
 use App\User;
+use App\Wallet;
 use Tests\TestCase;
 
 class UserTest extends TestCase
@@ -51,6 +52,7 @@
             User::STATUS_DELETED,
             User::STATUS_IMAP_READY,
             User::STATUS_LDAP_READY,
+            User::STATUS_DEGRADED,
         ];
 
         $users = \App\Utils::powerSet($statuses);
@@ -69,6 +71,7 @@
             $this->assertTrue($user->isDeleted() === in_array(User::STATUS_DELETED, $user_statuses));
             $this->assertTrue($user->isLdapReady() === in_array(User::STATUS_LDAP_READY, $user_statuses));
             $this->assertTrue($user->isImapReady() === in_array(User::STATUS_IMAP_READY, $user_statuses));
+            $this->assertTrue($user->isDegraded() === in_array(User::STATUS_DEGRADED, $user_statuses));
         }
     }