DEBT SOLUTIONS
Administration Order
DEBT SOLUTIONS
Administration Order
What is an Administration Order?
You might consider an Administration Order as a debt solution if you have at least one county or High court judgement against you.
It is a legally binding administrative arrangement, issued by a court which allows you to repay only what you can afford each month towards your debts.
An Administration Order is a formal, legally binding debt solution which allows you to repay debt owed to creditors over a period of time.
This is a debt solution for people who have a county or High Court judgement against them which they are unable to pay in full. Applications for Administration Orders are made to your local county court – they will decide whether or not to grant the Order.
Upon approval of the Order, all creditors declared in your application are managed with one monthly payment made to the local court. The local court will manage payments to all unsecured creditors within the Orders. Once the Order has been granted, any creditors included cannot take any further action against you without the permission of the court.
What debts can be included in an Administration Order?
All debts can be included in an Administration Order, however, there is the possibility that a judge may leave out some debts such as Council Tax arrears or criminal fines.
Some creditors can object to being included in an Administration Order. If this happens, the court will call a hearing to decide whether its fair to leave the debt in the order.
What if I owe more than £5,000?
If you’re debts total more than £5,00 you are not eligible for an Administration Order. However, you could possibly speak with your creditors to negotiate the amount of debt you’re able to repay to bring your debt level down to £5,000 to enter the order.
Some creditors may look favourably on this course of action if they think they will get more money back overall with an Administration Order.
Applying for an Administration Order
Step 1
Applying for an Administration Order is a straightforward process. You must complete an N92 form which can be found on the gov.uk website and hand it into your local court.
The court will then decide how much of your debt you will have to repay, the amount of your monthly repayments, the length of time it will take for you to complete your repayments. All debts should be repaid in a reasonable amount of time.
If a district judge is concerned that an Administration Order will not help you achieve this, there is a possibility they will suggest an alternative arrangement known as a compensation order which would still allow you to write off some of your debt.
Step 2
When establishing repayments, the court will assess your financial situation – taking into account essential expenses – to ensure you can afford monthly repayments.
This payment is made to the court which will then be distributed between creditors on your behalf. There is a court fee each time you make a payment, however, this cannot be more than 10 per cent of your total debt. For example, if you owe £2,500, it can’t be more than £250 in total.
Step 3
An Administration Order is added to the Register of Judgements, Orders and Fines where it will stay for six years. Once your debts have been repaid in full, your Order will be marked as ‘satisfied’.
Will an Administration Order affect my credit rating?
Yes. The details of your Administration Order will be visible on your credit history for six years. This could make it harder to obtain credit or make it harder to for you to open a bank account.
What if my circumstances change during an Administration Order?
Sometimes your circumstances change out with your control. You may lose your job, or a relationship might breakdown which can make repayments difficult or even impossible.
If your circumstances change during the course of an Administration Order, the most important thing to do is to make the court aware as soon as possible.
The court can review the Order to reduce the cost of monthly payments or could ask for a composition order which will write off some of your debt.
It’s important to note if you miss two payments in a row, the court is likely to review or even revoke the Administration Order.
If you find yourself in this situation you will receive a Notice of Intention and will need to reply within 14 days, otherwise the Order will be revoked.
If this happens, creditors are free to contact you again and could potentially add backdated interested and begin enforcement action to recoup payments. Should this happen, it’s imperative to speak to your creditors as soon as possible to arrangement payment.
What are the advantages of an Administration Order?
- You will make one monthly repayment towards your debt rather than juggling several payments to a number of creditors at the one time.
- Once approved, your creditors included in the Administration Order are unable to take further action against you without the court’s permission.
What are the Disadvantages of an Administration Order?
- This is only available to people who have at least one court judgement against them and have less than £5,000 of debt.
- If you are unable to keep up with payments, the court can take money directly from your wages in what is known as an ‘attachment of earnings order’.
- Your credit rating will be adversely affected.
- The Administration Order is added to the Register of Judgements, Orders and Fines.
- Costs are payable up to 10 per cent of your debt level.
Frequently Asked Questions
It is a legally binding arrangement between you and your creditors, issued by the court, which allows you to pay back only what you can afford to your debts over a period of time.
This can be done by filling in an N92 form and apply to the County Court for the order. The court will then decide how much you have to pay and the period of time you will pay it for.
An administration order lasts until the debts are cleared and the court fees paid. If there is a composition order, there will be a time limit on how long you pay for, usually three years. At the end of that time, you no longer owe the debts in the administration order.
Once you have paid your order in full, you can pay £15 to obtain a certificate of satisfaction from the court.
The details of your agreement will be kept on the Register of Judgments, Orders and Fines, who will mark your file as satisfied.
The creditors included will then no longer be able to take any action against you because you will have paid the amount agreed or in full.
The court can cancel or ‘revoke’ your administration order if you do not keep up with the payments.
If your administration order is revoked your creditors can pursue you again for each debt you owe in full, even if you had a composition order made.
As with all debt solutions, there is strict criteria which must be met to be considered eligible for an Administration Order. To apply, you must:
- Have debts that total no more than £5,000
- Have at least one county court or High Court judgement against you, which you can’t pay in full
- Have two or more debts
You cannot apply for an Administration Order if you don’t have a county court judgement against you. If you would like to enter an Administration Order, you will need to wait for a creditor to take legal action against you before you are able to apply for an Administration Order.
You could write off up to 75% of unsecured debt with our debt assistant.