An Administration Order can be a solution if you are in debt and already have a County Court or High Court judgment against you meaning you cannot pay the debt in full.
This guide will explain what an Administration Order is, how you can apply for one, and how the debt is repaid.
<h3>What is an Administration Order?</h3>
An Administration Order is a legally binding agreement between the person in debt and the creditors. It allows the debt to be paid back in instalments.
There are certain requirements you would need to meet before applying for this order, including:
<li>a County Court or High Court judgment against at least one of your debts,</li>
<li>a debt under Â£5,000 (though you can agree to partial repayment over this limit),</li>
<li>at least two debts,</li>
<li>proof you can repay the debt even if it is only Â£1</li>
If you are unable to pay the debt within a reasonable time (usually around 3 years) the court may grant a Composition Order. This is where the proposed repayments are so small the court will deduct 10% from the monthly instalments in addition to an administration fee. A Composition Order essentially caps the remaining debt and ensures collection is done at least in part.
However, those who can pay within a reasonable time can also apply. In theory, all debts can be included in the application, however, it is recommended that people leave mortgage or rent arrears out. In addition, council tax arrears and criminal fines are likely to be objected by creditors.
<h3>How to Apply?</h3>
To get an Administration Order, an application form, N92, will need to be filled out and filed at the County Court. This form sets out a statement of means to repay the debt, breaks down the arrears and lists the creditors.
The County Court will decide how much debt has to be repaid, the sum for the monthly instalments and how long the repayment plan will be. The courts allow creditors 14 days for any objections to the proposed repayment plan before granting the order when the repayment process will begin. The courts do not require a fee but will take 10% of the monthly payments to cover the costs, with the rest split between the creditors.
Once an Administration Order has been granted creditors will not be able to contact you for repayments or add interest to the debts but it will appear on your credit file for six years from the date of the order. It will also appear on the public Register of Judgements which will make it harder to take out further credit.
If you need advice on working out a repayment plan that suits your circumstances, there are specialist debt solicitors available to provide expertise with anything from filing the N92 form, to appointing an insolvency practitioner.
<h3>Getting help from Curtis Whiteford Crocker</h3>
At Curtis Whiteford Crocker, we provide help to people in Devon looking to manage debts. From bankruptcy to debt recovery, we are able to advise on a range of monetary issues and ensure the best outcome for you. Our friendly team is here to help you during this stressful time and can advise you on your options.
<a href=”https://oldcwcsolicitors.local/contact-us/”>Get in touch</a> with one of our offices in Plymouth, Torpoint, Tavistock, Plymstock or Kingsbridge and let us help you look ahead to your next chapter.