What is an administration order?
An Administration Order is a legally binding agreement that lets you pay only what you can afford of your debt each month. The amount that you pay is determined by factors such as your essential spends (like rent), general living costs, and which debts are a priority to pay. As long as you keep up with the court-ordered payments, all interest on your debt is frozen and your creditors will be legally unable to take further enforcement action against you.
The court usually takes a 10% administration fee from your monthly payments, so 90% goes to your creditors. Your money is then distributed amongst your creditors, according to what percentage of your total debt is owed to them. For example, if you are paying £100 a month and have £4,000 in debt, if one creditor is owed £2,000, they will receive £50 a month.
Would I qualify for an administration order, and is it right for me?
To be able to get an Administration Order, you need to meet all of the following criteria:
An administration order could be the rightdebt management solution for you if:
How long would an administration order last?
Your Administration Order would last for as long as it takes to repay the debt in full. This varies depending on the size of your debt, and how much the court has decided you can afford to pay monthly. If the judge believes that your payments aren’t big enough for the debt to be paid off quickly enough, they can instead make a Composition Order, where you’ll only be asked to repay part of your debt.
Are all debts included in an administration order?
Legislation doesn’t make clear which debts can and can’t be included, so different courts have different practises over whether they include secure debts, fines and priority debts. So, if you’re considering an Administration Order, it may be worth consulting your local county court for advice.
Will an administration order affect my credit rating?
Your Administration Order would be listed on the Register of Judgements, Orders, and Fines. This is available to the public via Trustonline, though a fee of £4 is charged to search this section of the register.
If an Administration Order helps you enough with yourdebt management that you pay off your debts in full, you can request the court marks your entry as “satisfied”, and give you a ‘certificate of satisfaction’, which will cost you £15.
However, the details of your Administration Order will be visible on your credit history file for six years. This might make it more difficult for you to open acurrent account, and you may berefused credit.