What is an administration order?

An administration order is a single County Court order on to which you put all of your debts. It allows you to make a single payment into the County Court, whic will then divide the money amongst the creditors listed on your application form.

What are the advantages of an administration order?
Whilst the 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 has been made.

Having an administration order can save you a lot of time and trouble as the court deals with your debts on your behalf.

It can also save you money if you were spending a lot on postage or on bus fares to make your payments.

If you apply for a composition order at the same time as you apply for your administration order, then the amount of time for which you pay is limited, usually to three years.

What is a composition order?
If you are only paying a very small amount to your creditors, there is the danger that your administration order could last for years.

A composition order is a way of trying to ensure that this does not happen. If the District Judge makes a composition order, it means that you only have to pay part of your debts, usually an amount that you could manage to pay over a three year period.

Any outstanding balances are treated as written off, although County Court judgements, and the fact that you had an administration order, still show up on your credit records.

Although the court should automatically consider whether it is appropriate to make a composition order in your case, you can use the "anything else you would like the court to take into account" box at the end of the form to say you would like a composition order.

If you still do not get a composition order, you can apply for one separately, by writing to the County Court to request a hearing. You should normally do this when you have made payments for six to eight months. You can then request a composition order at the hearing.

Who can apply?
You get an administration order if:

You have at least one County Court or High Court judgement against you.
The total of your debts is not more than £5000. (You may have heard that this limit is going to increase. Unfortunately, it is not likely that this is going to happen in the near future).
How do I apply?
You can 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 sued you.

The first page of the application form asks for a list of your debts. You should list them all, priority as well as non-priority, but make it clear if you have separate arrangements to cover your priorities in case these are excluded from the order.

Quote the account number, and the 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 as the 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 which aren’t listed elsewhere.

Complete the box saying what you can afford to pay, otherwise the court staff will decide for you. You can get an idea of how much you can afford by adding your pro rata payments together, or by using the available income figure on your personal budget sheet.

Do not sign the form at this stage. This is because you 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.

Keep a copy of your form, in case there are any problems.

What happens after I have submitted my application?
Once the court has accepted your application form, they will inform your creditors that you have applied for an administration order and sometimes give an indication of the type of order they would wish to make (ie stating payment level and whether a composition is envisaged).

Your creditors then have 16 days in which to inform the court of any objections that they may have, such as they think the offer you are making is too low, or they disagree with the amount you say they owe or they do not wish to be included in the order.

If no objections are received within this time, and the court staff 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.

Once the order is in place, you make your payments to the court and not to the creditors.

A hearing could also be necessary if it appears that it would take a long time to pay off the debts.

If there is any problem at all, the order should not be made or refused at this stage. A hearing should be arranged for you to attend at court, and a District Judge will consider your application. 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 reasons why, and asking for a new date.

Take statements or letters from your creditors with you as the court may want to see proof of your debts.

If your application is turned down you should seek advice. You may have grounds for appealing or re-applying.

How long does an administration order last?
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 the court for your payments to be reviewed, or you can apply to the court to vary the terms of the order if your circumstances change.

Problems with applying for an administration order
Your application should not be refused without a hearing. Here are some problems you might come across:

Some of my debts are in joint names
When you fill in the administration order application form, you state that another person borrowed the money with you, and put down their name and address.

You should still put down the total amount of the debt, and count it in full when deciding if your debts are under £5000. This is because when you borrow money with someone else, you are liable for the whole amount, not just for half each. This is known as ‘joint and several liability’.

This may cause problems if the other borrower is your partner, as the creditor will still be able to go to them for the money even if you get an administration order. If the other person also has a court judgement and debts of less than £5,000, they can apply for their own administration order.

Even if all your debts are in joint names you will still have to apply for an administration order for each person.

If you have only one court judgement between you, but it is in joint names, you can use the same judgement to make separate administration order applications.

I have not got any available income
Your application may be refused if the information on the form makes it look as if you do not have enough money to pay what you have offered.

Take a copy of your personal budget sheet to the hearing. If you have kept up payments on court judgements in the past you can tell the court this to show that you can afford the payments you have offered.

Tell the District Judge about any other circumstances you think she/he may not have taken into account.

If you have been turned down without a hearing, or you have had a hearing but still don’t know why the District Judge has refused you an administration order, you may be able to get an explanation by writing to the court. Address your letter to the Chief Clerk.

Other issues
Problems may arise regarding arrears of ongoing matters such as water, electricity, gas, council tax or rent.

If you have a fuel repayment meter which is set to collect arrears, it is possible to have the debt included in the order and the fuel board will need to remove this from your current setting and reset the meter to disregard arrears accordingly.

If you do not have a prepayment meter but wish to include fuel arrears in the order, the fuel board may insist on installing one to prevent the account from falling into arrears again.

In some instances arrears of all priority debts may be allowed in the administration order. It is important to include all details.

I cannot afford the payment I have been ordered to make
You can apply to change the amount you pay each month if you think the court has set your payments too high, or if you have a change of circumstances that means you have less available income.

You can use an N244 form, which is a general County Court application form. You can get one from your County Court office.

State that you wish to apply for a variation in the payments you are making under the administration order, and say why you are applying. You can attach a copy of your personal budget sheet to show how you have worked out your offer.

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.

Remember: You can always seek advice about any difficulty you are having in dealing with with your debt.




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