Administration Orders

An administration order is essentially for people with debts under £5000 already in possession of two or more county court judgements (CCJ's). It is controlled by the court who take regular, set monthly payments and give them to your creditors. This is done on a pro-rata basis, meaning that all your creditors receive regular payments towards your debts. This method of paying off your debts is a free service, although the court does take a percentage, normally 10% (i.e. 10p out of every £1), to cover the cost of administering the order, directly from your monthly payments.

Being in debt can be very stressful due to all the letters and phone calls threatening legal action. Under the administration order this harassment has to stop. The creditors are not able to take any action against you while you are under the jurisdiction of the court. You will no longer get debt collectors knocking on your doors demanding money. You will, however, still have to pay the debts but it does give you peace of mind that you are dealing with your problems head on.

How do I Apply for an Administration Order?

Luckily, this is a fairly easy thing to do. You can go to your local court and fill in form N92. The form is fairly straightforward but if you do need help you can always ask the court officer to assist you. Failing that, you can always go to the Citizen's Advice Bureau for free, impartial advice.

On the form you will have to include all your debts, which must total less than £5000. All the debts must be in your name. If you have a joint debt it must be included in full. If both parties are applying separately it is acceptable for the debt to be split between the two applications. Please note that married couples cannot apply jointly for an administration order.

When filling in the form you will notice that if you are in full-time employment you have the option to choose how to pay your monthly payment. Unless you choose otherwise, an attachment of earnings will be applied for by default. Many people in debt don't like others knowing they are having difficulties, particularly their employer, and therefore choose not to have the detachment of earnings order made. However, for those who find it difficult to make regular payments by themselves this can be an ideal solution.

What if I Can't Afford My Payments?

You will need to make sure that you meet your monthly payments on time without defaulting. If you do fail to pay what the order states then the court will in effect cancel, often called revoking, the order leaving you open to the wrath of your creditors. If you are having genuine difficulties meeting payments then you could apply for a reduction in the amount payable. This will only be considered if you have a significant change in your circumstances, such as losing your job or a close family bereavement affectng your finances.

Once you have completed the payments stipulated in the administration order you can apply for a certificate stating you have paid in full. This certificate is called a 'certificate of satisfaction'. There is, however, a fee for this certificate, at present that fee is £10.

Administration Orders are the ideal solution for those with minimal debts that have resulted in CCJ's but who are still being pursued by angry creditors.