Glossary
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- Administration Orders
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An Administration Order is a Court order that unifies outstanding credit debts and Council/Poll Tax arrears into a single payment, whilst protecting the debtor from further action from existing creditors.
Once the order is in place, the debtor must make a monthly payment to the Court, which takes on the responsibility of distributing the payments amongst the creditors, becoming the sole point of contact for any issues or enquiries regarding the debts.
No further action may be taken against the debtor without express permission from the Court; interest and charges are frozen and letters, phone calls and visits from debt collection agencies are expected to cease forthwith.
The Order remains in place until the debts covered therein are paid in full, although it is possible for the debtor to apply to renegotiate the terms of the agreement should they find their situation changes in any way. If the debtor ceases to make monthly payments, the order will cease and the debtor will lose any protection afforded by the agreement. The Administration Order can also be replaced by the Judge with a 'COMPOSITION ORDER', which works in a similar fashion except the repayment period is fixed. A Composition Order is generally set at three years.Administration Orders carry no upfront fee, however the Court takes a 10% charge to cover handling and processing from the payments made by the debtor. Details pertaining to the order will be retained by credit reference agencies for six years after the start date of the Order. A debtor will not qualify for an Administration Order unless they have two or more creditors, at least one County or High Court Judgements against their name, or if they owe more than £5000.
• Debtors may apply for an Administration Order by completing form N92, available from their local County Court office.
• Once the Court processes the completed form, creditors have sixteen days in which to make any objections to the agreement.
It is likely that during this period, major creditors such as landlords, utilities providers or mortgage lenders will object to the terms and attempt to reach an arrangement with the debtor separately. Once this time has elapsed, assuming the Court accepts the Debtor's offer, then the Order will be in place and creditors must seek a Court Hearing if they have any issue with the Order.
