What is an administration order?
If you have CCJ (County Court Judgment) debts you are struggling to repay, then you may be considering taking on an administration order, which can help you make these repayments and avoid further action from creditors.
An administration order is an agreement between you and your creditors that allows you to pay back your debts over a period of time, when you have a CCJ against you. It is legally binding and must be approved by the court, which also means your creditors must stick to the terms involved.
What does an administration order involve?
An administration order means you make one payment each month to your local court, which is then divided between your creditors.
If you do not have a CCJ, you are unable to set up an administration order. We recommend looking into other debt solutions that may be suitable for your situation.
Can you write off any debts with an administration order?
It is possible to waive a proportion of your debts. You will need to ask for something called a composition order, which means you only have to pay a proportion of what you owe. A judge will only consider issuing a composition order if you are unable to repay your debts within a reasonable amount of time. A composition order usually lasts three years.
What makes you eligible for an administration order?
There are certain criteria you must meet to be accepted for an administration order. You must:
- Have a CCJ against you – that you are unable to pay in full.
- Owe less than £5,000.
- Owe money to at least two creditors.
- Be able to provide proof that you can make regular repayments.
You have a responsibility to make the agreed repayments of your administration order in full and on time. If this does not happen, the court can issue an attachment of earnings order (where money is taken automatically from your wages each month to cover the cost of your administration order) or cancel the arrangement altogether.
If your administration order is cancelled, this means your creditors can pursue you again for what you owe in full. Ensure you are prepared before entering an administration order.
How to apply for an administration orderApplying is very simple. You will need to fill out an N92 form and send this to your local court. They will then consider your application and make decisions regarding:
- How long the arrangement will last.
- Whether you will have to repay all of your debt or just part of it.
- How much your monthly repayments should be.
Once a decision has been made, your administration order can be arranged and you can begin making repayments.
Is there anything to pay when setting up an administration order?
There is nothing to pay to set up an administration order but it’s worth noting you will be charged a fee of 10% for every payment you make to the court – we have a good example of the type of charges to expect here – this is taken as a processing fee and is unavoidable.
If you want proof your administration order is complete once your debts are paid, you will also need to pay £14 for a certificate of satisfaction. This can be obtained by writing to the court and sending a cheque.
Is an administration order listed anywhere?
An administration order will be visible on your credit report for six years from the date it was issued. It will also be listed on the Register of Judgments, Orders and Fines. However, once the administration order complete, it will be noted as satisfied.
Is an administration order right for you?
Before settling on a debt solution, it’s important to weigh up all potential options available to you. At PayPlan, we have a variety of advice guides on the different debt solutions available.
If your CCJ debt is more than £5,000, for example, a debt solution such as an IVA may be a better option. This would allow you to make regular repayments while freezing all interest and charges – paying what you owe over a set period, which is usually five or six years.
Administration orders are there to assist you if you are tackling CCJ debts. However, it’s really important to make sure you fully understand the implications of this debt solution and the responsibility you will need to take on to make repayments.
Speak to our team here at PayPlan, on 0800 280 2816 for free debt advice or if you have any further queries around administration orders.