What is an Administration Order?
An Administration Order is an agreement designed to help you deal with your debts when you have a County Court Judgment (CCJ) or High Court Judgment against you that you can’t afford to pay. Providing you meet certain criteria, your application for an Administration Order should be accepted.
It is a formal, legally-binding agreement made between you and your creditors that is approved by the court. You will arrange to repay your debts in full by making reduced monthly payments over a longer period of time.
An Administration Order allows you make one affordable payment through the court each month, and the court divides this amongst your creditors on a pro-rata basis.
Once an Administration Order is in place, it prevents individual creditors from taking any enforcement action against you without obtaining permission of the court.
How do I qualify for an Administration Order?To apply for an Administration Order, you must meet the following criteria:
- Have at least two credit debts
- Have at least one County Court Judgment (CCJ) or High Court Judgment against you that you can’t afford to pay in full
- Have total debts of less than £5,000 (including any interest and charges)
- Prove that you’ll be able to afford monthly repayments
How to apply for an Administration Order
Here are the steps you need to apply:
Step 1: Get a copy of the Administration Order application form (Form N92) from your local County Court or the gov.uk website. There are guidance notes (Form N270) that are also available and will help you complete it.
Step 2: Complete the Administration Order form as detailed in the guidance notes, but don’t sign it – you’ll need to do this in front of the court staff, so you will need to arrange an appointment at the court to submit the form and sign it.
Step 3: Make sure you fill in the box to show how much you can afford to pay – if you don’t fill this in, the court staff will work this out for you. You can get an idea of how much you can afford by completing the Income & Expenditure sections (steps 6 & 7) on the form.
Step 4: Part B asks you to list down all the unsecured creditors you owe to, such as loans, credit cards, store cards etc. and how much you owe to each of them.
Step 5: Part C is where you make your offer of payment. This should be based on a pro rata share of your surplus income once you have taken all essential household living expenses from the household income.
- Pro rata payments can be calculated by dividing the individual debt by the total debt x surplus income (debt of £1,500 divided by total debt of £6,000 x surplus of £100 per month = £25 pro rata payment)
Step 6: Contact your local County Court to arrange an appointment to go in and submit your application. The court staff will go through your application form to make sure everything is clear, and they’ll witness your signature. There is no fee payable to submit your application, but costs are added to the sum you would repay at 10 pence per pound repaid.
You will need to take with you the completed, but unsigned, application form (N92), any statements or letters you’ve received from your creditors about your debts and a copy of the County Court or High Court Judgment.
Ensure you keep a copy of your completed Form N92 for your records.
What happens next?
After you’ve submitted your application form, the court will contact all the creditors listed in your Administration Order application. Your creditors then have 16 days in which to make any objections to the court.
They may think your offer of repayment is too low, or they may disagree with the total amount due. Some creditors may ask to be excluded from the Administration Order – priority creditors like mortgage, rent, gas and electricity are likely to object because they will want to make separate arrangements.
If there are no objections from your creditors within the 16 day period and the Court staff and District Judge are happy with your offer of repayment, the Administration Order will be made. As long as you make the agreed payments in full and on time, your creditors cannot take any action against you.
If there are objections from your creditors within the 16 day period there will need to be a Court hearing to resolve the queries. The Court will arrange the hearing and you must attend. The hearing normally takes place in the Judge’s chambers, not a court room. The creditors who have objected may also attend or send a representative. The District Judge will consider your application and the objections that have been raised. You will be given a chance to state your case. If the queries can be resolved, the Administration Order will be granted.
How long will the Administration Order last?
Your Administration Order will last until you’ve repaid all the debts included in the order, unless the District Judge makes a ‘Composition Order’.
A Composition Order is an order that a District Judge can make which limits the time you repay your debts in an Administration Order to three years. It may be considered if your debts cannot be cleared within a ‘reasonable’ time. You can request a Composition Order in Part C of the N92 application form, but the decision lies with the Court.
Details of your Administration Order will be recorded on your credit reference file for six years from the date the order is made. It will also be added to the Register of Judgments, Orders & Fines – again, this will usually be removed six years after the date the order is made.
For more information about Administration Orders please contact your local Citizens Advice Bureau or for further help, please contact our Advice Team on 0800 917 781.