Administration order

Warning before you apply for such an order we suggest that you seek advice

What is an administration order?

An administration order is an order of the court consolidating the client's debts. This means the client makes one payment into court each month which the court then distributes to the client's creditors on a pro rata basis.

The court can also make a composition order. This means that only a proportion of the debt is repaid. This is decided by the District Judge who must consider a composition order where the debts cannot be cleared within a reasonable time (usually three years). A person can also request a composition order at the time of applying for the administration order. Creditors rarely oppose an administration order but may oppose a composition order.

What one needs to know about administration orders

The main things the client needs to know about administration orders are:-

  • One makes the application for the administration order.
  • The total debt must be £5,000 or less.
  • One must have a county court or High Court judgement against her/him.
  • One must have at least two debts
  • One makes a single payment each month to the court. This payment is based on her/his ability to pay.
  • Once an order has been made by the court, interest and charges are frozen.
  • A creditor cannot take any further action to recover any debt included in the schedule without permission of the court.
  • There is no up-front fee but the client must pay the court's handling fee, currently ten per cent of the money repaid.
  • If the client fails to make payments, the court can revoke (cancel) the administration order.
  • One may be ordered to pay through an attachment of earnings order. This means the payment is deducted direct from the client's wages
  • Administration orders are entered on the Register of Judgements, Orders and Fines. This may make it difficult for the client to obtain credit in the future.
  • An administration order can be reviewed at any time by the court.

REMEMBER: Before you apply for such an order we suggest that you seek advice.