Administration Order

An Administration Order is an order by the courts covering all of your outstanding debts whereby you make regular payments to the court towards your debts and the court will distribute those payments on a pro-rata basis to each of your creditors.

In order to be eligible to apply from an Administration Order you must meet the following criteria:

  • have had at least one county court judgment issued against you, and
  • have outstanding debts with at least 2 creditors
  • have total outstanding debts of less than £5,000
  • can prove that you have disposable income to make payments

During the course of the Administration Order the court takes a fee from each payment as a handling fee, which cannot be more than 10% of your debt. It is up to the court to decide:

  • how much of your debt you have to repay, eg all or just part of it
  • how much your monthly repayments will be
  • how long the arrangement lasts

The arrangement is known as a ‘composition order’ if you can’t pay all your debts

Advantages

  • One payment covers all creditors
  • You have a binding agreement ratified by the court
  • You may benefit from some debt ‘forgiveness’ and only repay part of the debt

Disadvantages

  • The order covers relatively small debts
  • You need to already have a CCJ against you
  • The order will still adversely affect your credit file for 6 years even if you have repaid in full

You apply by filling in form N92 that you can get from your local court office

If you do not keep up with your repayments, the court can revoke the order and your creditors will pursue you for the full amount owed to them. If you feel you cannot afford to pay the amount requested of you, you can apply to the court and ask them to reduce your payments.

If your debt is paid off in full, you can obtain a “Certificate of Satisfaction” from the court. There is a fee of £15 for this certificate.

Money Advice Services logo

There are sources of free and impartial money advice set up by government to help people with their finances. To find out more, click on the Money Advice Service logo.

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