What is an Administration Order?

An administration order is a debt solution obtained through the courts. To apply, you’ll need to have a county court or high court judgement against you and be in a position where you cannot afford to pay the debt. We’ve detailed just about everything you may need to need about this option below:

What is an administration order?

An administration order is a legally binding arrangement between you and your creditors to resolve your debts over time.

To obtain one of these, a creditor must first take legal action against you through either a high court or county court judgment. If you cannot pay the ruling in full, you could apply for an administration order to resolve the debt providing:

  • You have more than one creditor.
  • Your debts total no more than £5,000.
  • You can afford to make regular payments towards your creditors.

If the courts decide that you cannot pay your creditors back in a reasonable time, they may grant a composition order – this means some of your debts could be written off.

How does an administration order work?

To apply for an administration order you should complete an N92 form – available through the gov.uk website – and take it to your county court. Once the document has been signed in front of a court officer, the repayment plan is presented to your creditors.

They have around 14 days to confirm any objections or amendments to this. Assuming there are none, your administration order should be approved and set up within a few weeks. However, if a creditor does object, then a separate hearing will take place to resolve the matter.

One of the elements looked at during your application will be how long debts should take to resolve based on how much you can pay. The court will examine your creditors – and the amount owed – and specify a “reasonable period”.

However, if it would take an excessive amount of time to repay your debts, a composition order could be implemented instead. These usually last for three years and focus on paying back as much of the debt as possible.

How much does an administration order cost?

Once the administration order is approved, you’ll make monthly payments to the court. They will divide this sum between your creditors. Every time you make a payment, there will be a fee. This varies from person to person but will not be more than 10% of your total debt.

For example, if you owe £2,000, you won’t pay more than £200.

Being taken to court for debts is unfortunately quite common. In 2019, more than one million county court judgements were issued.

Need help with an administration order?

Although we cannot assist with setting up an administration order, we can identify whether another debt solution such as an IVA is a better solution. To speak with one of our specialist debt advisors, give us a call or click the button below.

With no obligation on your part, we’ll be happy to assess your circumstances and identify whether an administration order is a suitable option.

   

Why choose us?

  • We help more than 500 people every day.
  • On average, we write off £13,500 per client.
  • 120 staff members are here and ready to support you.

Administration Order FAQs

What is a county court judgement?

What is a county court judgement?

A country court judgement can be issued by the courts in England, Wales, and Northern Ireland if you’ve failed to pay your debts. This will not come out of the blue and, before seeking this ruling, a creditor must notify you that they are taking legal action.

The county court judgement will detail what you owe, to who, and how much you need to repay.

What is a high court judgement?

What is a high court judgement?

A high court judgement is a formal decision which states – after deliberation and weighing up the facts – you owe money.

What are administration order advantages and disadvantages?

What are administration order advantages and disadvantages?

An administration order, when compared with some debt solutions, does have pros and cons. For example:

Advantages

  • The monthly payment will likely be more affordable than making multiple payments to your creditors.
  • Your assets may not need to be sold if an administration order is issued.
  • As this is a formal debt solution, creditors shouldn’t contact you regarding how much you owe.

Disadvantages

  • Your credit rating will be adversely affected by this debt solution.
  • There will be regular fees, charged by the court, for managing an administration order.
  • Failure to make the monthly payments can lead to even more severe legal action.
  • The process for getting an administration order limits it to only certain groups of people. For example, a creditor must have taken you to court before this even becomes an option.