If you’re struggling with unaffordable debt in the UK and have received a County Court Judgment or High Court Judgment, you may be interested in an Administration Order.
It’s a legally-binding agreement between you and your creditors that allows you to repay your debts in affordable installments over a period of time.
What is an Administration Order?
Method to repay a County Court or High Court Judgment
An Administration Order is a solution designed to help those in debt who have County or High Court judgements against them that they cannot pay in full.
It’s a legally binding agreement, available to those living in England, Wales and Northern Ireland, that’s made between you and your lenders to pay back what you owe for a set period of time – usually three years. Your total debt level cannot be more than £5,000 and you must owe at least two debts you can’t afford to repay.
Like other debt solutions, it protects you from any further action being taken against you and your creditors won’t be able to get in touch with you without the court’s permission.
You’ll make an affordable monthly payment to them that will then be split between all the people you owe money to until the balances have been cleared completely.
What debts can be put into an Administration Order?
What debts you can include in an Administration Order is dependent on the court that you apply to. This is because there is nothing within the law for this solution that specifies what debts can and cannot be included.
Generally, you can include most unsecured debts, but it’s best to check with the court or a district judge whether there’s anything that cannot be included.
Do I have to pay a court fee to apply for an Administration Order?
There is no standalone court fee to apply for an Administration Order in the UK. However, the court will deduct 10% of the amount taken under the order to recover its costs.
This means that if your creditors are receiving a total of £100 a month under the order, the court will deduct £10 as its fee, and your creditors will receive the remaining £90.
It’s important to note that the amount deducted by the court will not affect the amount you owe to your creditors, as it is a separate fee paid directly to the court.
How to apply for an Administration Order
The process to apply for an Administration Order can seem complicated. To help explain the process a little better, we’ve mapped it out in a simple step by step guide:
Filling out N92 form
The first step to getting an Administration Order is to get the relevant forms to fill in. To apply, the form you’re looking for is an N92, which you can get from your local county court or it’s available to print off on the government website.
When filling this in, you’ll need to list all your income, expenditure and details of all the debts you owe. However, it’s important that you do not sign it at this stage as you will need to do this in front of the court.
Submitting application to your local county court
At this point, you will need to contact the court to arrange an appointment to go and submit your application. A clerk will go through your application to check that everything is in order before witnessing you sign the forms.
You will need to make sure that you bring copies of any letters or statements from the companies you’re in debt to along with a copy of the judgment letter from the County/High Court.
There is no fee to pay for submitting your application, but as mentioned above the court will take 10% of your payments to cover their costs.
County court contacts your creditors
Once you have submitted the application to the court, they will then get in touch with all the lenders included – giving them 16 days to respond with any objections to the order.
If all the creditors approve, and the judge and court have no problems with your proposed payments, then they will grant the order.
However, should any of the companies submit an objection within the given timeframe, then the court will need to hold a hearing to try to resolve this. It will be required that you go to this and it will normally be held in the Judge’s chambers along with someone from the objecting company.
Debt Solution Finder
Discover the ideal debt solution for your needs with our debt solution finder.
Administration Order becomes a legally binding agreement
Once the proposal is approved, the order will be made legally binding. All you then have to do is keep up with the agreed payments and your lenders cannot take any action against you.
When it has been granted, the order will be put on the Register of Judgements, Orders and Fines, where it will stay for six years. This will also show on your credit file and cannot be changed until all your debts have been cleared.
Administration Order advantages and disadvantages
There are many things to consider when deciding if this is the debt solution you want to go for, so we’ve laid out all the benefits and disadvantages below for you:
Advantages of a Administration Order
- Legally-binding for creditors, ensuring their compliance upon approval.
- Payments are tailored for affordability, easing your financial burden.
- Halts interest and charges, relieving financial pressure.
- No upfront fees, but 10% used to cover court administration costs.
- Safeguards your home, eliminating the need for selling or remortgaging.
Disadvantages of a Administration Order
- Debt exceeding £5,000 will disqualify you from an AO.
- Requires you to have received a court order from County or High Court.
- Court involvement can lead to time-consuming processes.
- Negative credit impact will endure for six years.
- Payment difficulties may lead to wage arrestment or order cancellation.
Living with Administration Orders
Once your order has been granted, all you need to do is make your payments and make sure you keep on top of them.
You will make these payments regularly until you have cleared the remaining debt included in your application. The only exception to this is if the Judge decides to give you a ‘Composition Order’.
This is an order that can be made in order to limit the time you will pay back your debts to a total of three years and is normally used if the judge thinks you won’t be able to clear your debts in a reasonable amount of time.
When you have made all required payments, you will no longer be in debt to the companies included. If you need to, you can ask the court for a ‘certificate of satisfaction’ – but this will cost you £15.
Will an Administration Order impact my credit rating?
Yes, an Administration Order will impact your credit rating in the UK. It will be recorded on your credit reference file and will remain on record for six years from the date it was granted. This can make it more difficult for you to obtain credit or loans during this period.
It’s important to note that if you have already received a County Court Judgment or High Court Judgment prior to applying for an Administration Order, this will also impact your credit rating and will be recorded on your credit reference file for six years.
An Administration Order may be a better option for managing your debt as it allows you to make affordable monthly payments towards your debts and can prevent further legal action being taken against you by your creditors.
Find debt help, just like Glenys
“Nothing is too much trouble, the team is very helpful. To be in this position, living with debt, is hard enough but made so much easier when you’re put at ease and there’s no judgment.” – Glenys, 5-star Trustpilot review
Where can I get free debt advice and guidance on my financial situation?
If you’re struggling with unaffordable debt and have received a court order, it can be a stressful and difficult situation to manage. At Talk About Debt, we understand the challenges you’re facing and are here to help make your life a little easier.
As a leading UK debt solution provider, our team of experienced advisors can guide you through the various options available to you, and help you make an informed decision about your next steps.
If you’d like to learn more about how we can help, don’t hesitate to contact one of our advisors today. We’re here to support you every step of the way.