What is an Administration Order?

27 May 2008

It’s a mistake to think the courts are only there to help creditors. If you’re having problems keeping up with monthly payments to your debts, you may be able to ask the County Court for an Administration Order (see ‘Do I qualify for an Administration Order?’ below).

An Administration Order would group all your debts together and lay down how much you can afford to pay towards them all each month. You’d make just one monthly payment to the Court, which would then pay each creditor an agreed amount. The Court would also take a small percentage of the money to cover costs.

As long as you kept up the repayments laid down in the Administration Order:

• all interest on the debts would be frozen,
• you shouldn’t get any letters or phone calls from the creditors included in it,
• your creditors wouldn’t be able to take any action against you without court permission, and
• you shouldn’t get any more visits from debt collectors.

If everything went as planned, the Administration Order would run until all the debts were paid off*, although you (or your creditors) would be able to ask for the repayment amounts to be reviewed if your financial situation changed.

Do I qualify for an Administration Order?
Administration Orders are only available to people who:

• have at least two creditors,
• have at least one County or High Court Judgment against them, and
• owe less than £5,000.

If you think you qualify, you can ask your County Court for form N92. If you’d like more information about Administration Orders, or you’re not sure it’s the best way for you to manage your debts, talk to a debt adviser.

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*If the Court thinks it would take you too long to repay your debt, you may be granted a Composition Order, a special kind of Administration Order which means you’ll make payments for a fixed period (normally 3 years), after which the outstanding debt will be written off.

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