What is an Administration Order?

An Administration Order is a single court order that deals with all credit debts plus arrears on council tax/poll tax debts. It allows you to make a single monthly payment to the court. The court staff will then divide the money amongst your creditors.

At present there are no hard and fast rules for making an Administration Order application. Practices differ from court to court and area to area.

Advantages of an Administration order.

Whilst the Administration Order is in place, none of the creditors listed on it can take any action against you without first getting the court’s permission. Visits from debt collectors, letters or phone calls from your creditors, should stop once the Administration Order is in place.

• Having an Administration Order can save you time and trouble as the court deals with your debts on your behalf.
• Any interest and other charges that were being added on to the debts are stopped.
• You do not have to pay a fee up front to the court for an Administration Order. The court will take a handling fee of 10 pence out of every £1.00 you pay in over the time the order lasts. This means the handling fee is 10% of your total debts. The fee is deducted from your payments into the court.
• If you apply for a composition order at the same time as you apply for your Administration Order, then the amount of time you make payments for is limited, usually to three years.

You can get an Administration Order if:

• You have at least two credit debts;
• You have at least one county court or High Court judgment against you;
• Your debts are under £5,000.

Applying for an Administration Order

• You apply for an Administration Order on Form N92 which you can get from your local county court office. It comes with some notes to help you complete it.
• Put the name of your local county court on the form. This may be a different court to the one in which your creditors have taken you to court.
• The first page of the application form asks for a list of your debts. You should list them all, arrears on priority debts as well as the total credit debts, but make it clear if you have separate arrangements to cover your priorities. Quote the account number, and the creditor’s address to which the court can send your payments. If your creditors have passed the debts on to a solicitor or debt collection agency, give this address for payment.
• The other pages ask for details of your family and employment circumstances and details of your financial situation. This is similar to your personal budget sheet and you can simply transfer the information on to the form, using the spaces marked ‘Other’ for expenses that aren’t listed elsewhere.
• State what you can afford to pay, otherwise the court staff will decide for you.
• If you are on Income Support/other benefit, or a low income, it is likely that the court will accept an offer of £5 per month as being a reasonable amount for you to pay.
• take statements or letters from your creditors with you as the court may want to see proof of your debts. They will also want a copy of any county court or High Court judgments you have listed.

DO NOT sign the form at this stage: you will need to take it to the court yourself and sign the declaration in front of a court officer, to say that the information it contains is true to the best of your knowledge. The court officer may go through the information you have put down, and query anything that is not clear.

Processing an Administration Order Application.

• Once the court has accepted your application form they will inform your creditors that you have applied for an Administration Order.
• Your creditors then have 16 days in which to tell the court of any objections that they may have. They may think the offer you are making is too low, or they may disagree with the amount you say you owe.
• Your creditors can also ask the court to leave them out of the Administration Order. Priority creditors such as mortgage, rent, gas and electricity are likely to object because they want to make separate arrangements.
• If no objections are received within this time, and the court staff and District Judge are happy with what you have offered, then the order will be made. Provided you pay what you have offered, the creditors can take no further action.
• If there is any problem at all, the order should not be refused without a court hearing. A hearing should be arranged for you to attend at court and a District Judge will consider your application. This hearing should be held in the District Judge's private rooms. If creditors have objected, they, or their representative, may attend the hearing too. You should be given a chance to state your case, and if the problems are then resolved, the District Judge will make the order.
• You must attend the hearing. If you cannot go, you should write to the court explaining the reason why and ask for a new date.
• Once the order is in place, you make your payments to the court and not to the creditors.

Duration of an Administration Order

Unless the judge makes a Composition Order, or you stop making regular payments, an Administration Order will go on until all the debts are paid off in full. Your creditors may ask for your payments to be reviewed, or you can apply to change the terms of the order if your circumstances change. Details of your Administration Order will be recorded on credit reference files for a period of six years from the date of the Administration Order.

Reasons why an Administration Order may be declined

The rules relating to how the court considers Administration Order applications have recently been changed. This means that courts in different areas of the country handle them in different ways. Your application should not be refused without a hearing. If you have to go to a hearing, it may be useful to contact a local advice agency such as a  Citizens Advice Bureau, all of whom may have experience of your local court’s policy. Here are some problems that you might come across.

• Debts are more than £5,000
• Some of my debts are in joint names
• No available income