What is an Administration Order?
If you are struggling to meet your minimum repayments and are in desperate need of debt help, an Administration Order may be the answer. An Administration Order is different from an Unsecured Debt Consolidation Loan or a type of Bad Credit Loan. This is a form of debt help offered by a court. The objective is similar: to help you get out of debt by consolidating your payments into one single monthly payment for all your debts.
Where do I apply for one?
An Administration Order is an order issued by a court which covers your outstanding debts. Under this order you would make one monthly payment to the court, who will then distribute that money on a pro rata basis to your creditors.
For processing an Administration order, there are handling fees involved, usually 10% which is taken by the court to cover their costs. This would be deducted directly from your monthly payment. A professional Debt Advisor can explain all costs involved.
Once the Administration Order is in place no creditor involved, without the consent of the court, will be allowed to take action against you. In addition, any correspondence, i.e. letter and phone calls will be stopped.
Who can apply for an Administration Order?
To be able to apply you must have:
- At least one County Court (or High Court) Judgement issued against;
- At least 2 creditors; and
- Your total debt must be less than £5,000
Applying for an Administration Order
To apply for an Administration Order you must complete an N92 form which can be obtained from your local court office. On the form you must list all your debts so the court can calculate a pro-rata payment to repay to the creditors.
Administration Orders are only open to individuals, couples cannot apply jointly and must make separate applications.
Where a couple each make individual applications for an order at the same time and their is a joint debt, it may be acceptable to divide the debt equally between the two applications.
There is no start up or application fees to setup an Administration Order. The only charges incurred from the court will be 10p in every £1 which they deduct to cover their admin costs.
If you are employed an Attachment of Earnings Order will be made. This will mean contacting your employers. If you do not want this to happen you must state it on your N92 form.
Payments must be made monthly or as arranged by the court. Failure to maintain payments may mean the court will revoke the order and you would revert back to your original arrangements with your creditors. Your creditors would also be entitled to pursue you for the full amount owed to them, which could mean harassing phone calls, letters and intervention from Bailiffs.
If you have a legitimate change in circumstances and you feel you cannot keep up the repayments you have originally agreed ,you can ask the court to review your situation and look to reduce the amount to one you can afford.
Once you have completed the Administration Order and paid off all your arrears, you can obtain a "Certificate of Satisfaction" from the court. There is a charge for this, usually £10.
Nowadays, there are more debt help options available so that debtors can get out of debt. For more information on Administration Orders and other debt help options contact the UK Debt Advisor and we will talk you through your options. Alternatively, try out Product Advisor.