Administration Order

An Administration Order is a UK debt solution for individuals with unmanageable debts. It consolidates debts into a single, affordable monthly payment and is supervised by the court over a set period of time.

In this guide, we will explore who qualifies for this debt relief option, take you through the application process, look at the types of debt an Administration Order may be able to help you with, and examine the alternative options available to those struggling with unmanageable debt.

Summary

• An Administration Order is a UK debt solution that consolidates debts
• It's supervised by the court and offers a structured path to settling debts over a set period
• To qualify, you need at least two unsecured debts and a County Court or High Court Judgment
• Common eligible debts include personal loans, credit card debt, and overdrafts
• It stays on your credit file and a public register for six years

What is an Administration Order?

An Administration Order is a financial solution available in the United Kingdom, where the court may step in to help individuals struggling with unmanageable debts.

When you apply for an Administration Order, the court decides whether to approve your request. If accepted, the court takes a closer look at your debts and assesses your financial situation. Based on this evaluation, the court may decide to consolidate your debts into a single, affordable monthly payment plan.

This structured approach to debt repayment is designed to make it more manageable for you to settle your outstanding debts, while the court's permission enables you to protect yourself from creditors.

Will an Administration Order hurt my credit?

When you obtain an Administration Order, it will be recorded in the Register of Judgments, Orders, and Fines. This register is accessible to various institutions, including credit reference agencies and potential creditors.

This information will also be listed on your credit report for a period of six years. The presence of an Administration Order on your credit file sends a signal that you've struggled with debt management in the past.

As a result, your creditworthiness is likely to be negatively affected. When you apply for credit or financial services, lenders may view you as a borrowing risk, making the process of obtaining credit on favourable terms more challenging.

It’s worth considering that failing to deal with unpaid debts, whether through an Administration Order or another debt solution, can lead to further action against you, potentially worsening your credit situation.

How does an Administration Order work?

An Administration Order is initiated by submitting an application to the court, accompanied by a court fee (10% of the amount paid, which the court will deduct automatically).

Upon receiving your request, the court reviews your financial circumstances and decides whether to grant permission for an Administration Order.

If approved, the court will consolidate your existing debts into a single manageable payment, taking into account your disposable income and essential living expenses.

This court-sanctioned repayment plan ensures that you pay a reasonable amount each month, which is then distributed among your creditors and shields you from further legal actions by your creditors.

Who qualifies for an Administration Order?

To qualify for an Administration Order, you must meet specific criteria set by the court. Here are the key eligibility criteria:

Two or more debts: You should have at least two debts outstanding in order to qualify. This can include various types of unsecured debts, such as personal loans, credit card debt, or overdrafts. An Administration Order is a solution that can help you manage multiple debts simultaneously.

County Court Judgment (CCJ) or High Court Judgment: For an Administration Order to be viable, you need to be subject to at least one County Court Judgment or High Court Judgment. These are legal orders issued by the courts, indicating that you owe a specific amount to a creditor, and it's legally enforceable.

Debt amount: Administration Orders are typically suitable for individuals with moderate levels of debt, and the total debt you owe should be no more than £5,000.

Meeting these criteria is crucial when applying for an Administration Order. The court will assess your financial circumstances to determine if this debt solution is the right option for you.

Debts that can be included in an Administration Order

An Administration Order allows you to include various types of unsecured debts (or common debts) that can be challenging to manage individually, and consolidate them in a structured repayment plan.

Some of the debts that can be dealt with via an Administration Order include:

• Personal loans
• Credit card debt
• Overdrafts
• Store cards
• Payday loans
• Utility bill arrears
• Catalogue debts

These are examples of common debts that can be included in an Administration Order, but the arrangement won't cover all your debts. It's essential to get debt advice in order to ensure that your debts meet the eligibility criteria set by the court before they are included.

Debts that can't be included in an Administration Order

While an Administration Order is a helpful debt management solution, there are certain types of debts that cannot be included in this arrangement. These ineligible debts remain your responsibility, and you must continue to address them separately.

Here are some common examples of debts that generally can’t be included in an Administration Order:

• Secured debts (those secured against an asset like your home or car)
• Child support and maintenance arrears
• Student loans
• Criminal fines and other penalties

It's crucial to consult with a qualified debt advisor or financial expert to fully understand which specific debts can and cannot be part of your Administration Order.

How to apply for an Administration Order

Applying for an Administration Order is a structured process that requires careful attention to detail. Here are the steps involved in applying for an Administration Order:

Seek debt advice

Begin by seeking professional debt advice. You can obtain free debt advice from various sources, including your local advice agency or debt charity. This step is crucial in determining whether an Administration Order is the appropriate solution for your financial situation.

Obtain an N92 application form

Visit your local county court to obtain an N92 application form. You can ask the court staff for assistance in acquiring the necessary form.

Complete the application form

Take your time to fill in the application form accurately. List all your outstanding debts and provide details of your creditors.

Additionally, you will need to propose an amount you can realistically afford to pay towards your debts, based on your current financial situation.

Submit your application

Hand in your completed application form to the court where you obtained it. Your application will be reviewed by a local or district judge who will make a decision regarding the Administration Order.

Remember that it's crucial to be honest and transparent about your financial circumstances when completing the application.

This will help ensure that the proposed payment plan is realistic and sustainable for you.