Administration Order
If you have a County Court Judgement (CCJ) or a High Court Judgement for a debt you’re unable to pay, an Administration Order could help you settle these debts.
What’s a County Court Judgement? This is where creditors take action against you if you have an unsettled debt and you do not respond to it. Don’t worry, it won’t lead you straight to declaring bankruptcy or insolvency. You’ll have the opportunity to respond to the court claim:
- Paying the full amount you owe. You could pay your creditor by sending a cheque or postal code and it must bear the creditor’s name and address on the claimant’s form. You could also pay the creditor in person. Always keep a proof of your payment for reference.
- Paying the partial amount. You have the opportunity to pay your loan in installments or to a specific date. You’d have to be specific on how much you’d pay monthly or the specific date on when you’d be paying what you owe, and you’ll be sending a completed form to the address listed.
- Counterclaim. If you think that you don’t owe money from the person/business or you’ve already paid the debt, you could file for a counterclaim. You’d need to pay court fees for you to be able to file a counterclaim. You’d be invited for a hearing, and the court would determine if you owe the money or not.
If the court has decided that you owe money to the creditor, you have 21 days to appeal on their ruling.
Now, you’ve received a County Court Judgement, and you determine that you owe money to the creditor but you don’t have the money to settle it. Administration Order is one of the options for you.
One good thing about the Administration Order is, when your creditors are listed on the Administration Order, they cannot take further actions against you without the approval of the court.
There would also be a court fee (10%) every time you’d be making a payment, i.e., you owe £4000, your court fee would be £400.
How to get an Administration Order?
You’d be qualified for an Administration Order if you meet the following criteria:
- debts that are no more than £5000 in total
- two or more debts
Could I still get an Administration Order even without the County Court Judgement? If you’d like to get an Administration Order without the CCJ, you’d have to wait for one of your creditors to proceed with court action against you.
I owe more than £5000 to my creditors. Could I still apply for an Administration Order? If your debts total is more than £5,000, you may negotiate with your creditors to wipe off some number of the debts so your debt would be within the administration order limit. A creditor may conform to this if they think they’ll get extra money back overall with an administration order.
On the other hand, you can seek help from a charity or grant fund to cover some of your debts to bring you below the £5,000 limit.
Can we apply for an Administration Order if we have a Joint Debt? You can’t apply for an Administration Order in conjunction with the people who share your debt. This could only be applicable if each person who shares the debt will get an Administration Order individually.
There are courts that accept joint debts if the debt is already listed on the debtor’s application. If so, you should be putting a note on your application form. It would be best also to ask your local court on how they deal joint debts.
Preparations for your application
- Know what you owe and to whom do you owe it to. Now that you’d be applying for an Administration Order, you’d first know the specific details of your debt:
- Type of your debt
- Your creditor. You’d need to confirm who your creditor is, and sometimes your debt could have been sold to a debt collection agency. You should state on to where and when your debt was passed
- The amount you owe
- If it’s a joint debt or not
- Create a budget sheet. Included in the form is a budget sheet where you’d indicate how much your monthly earnings and expenses is, so the court could determine how much and how long you’d be paying.
- Reach out to the Court. You’d have to have an N92 form from the court. It would also be an extra mile if you’d confirm with the court what other documents you’d need to submit. Again, be sure that your debt would be below £5,000. Your application would be denied if it’s over £5,000.
- Pieces of Evidence. As previously mentioned, the court needs your monthly inflow and outflow to determine how much you’d be paying and for how long. Here are some common documents needed:
- Details from your creditors, documents that are related to your debt
- Rent or mortgage agreement
- Proof of savings
- Source of income
All documents that you’d be submitting must be photocopied, and you should keep all original copies. Also, don’t sign the application form. You’d be signing that in front of the court staff.
Administration Order: The Process
Now that you’ve completed your paperworks, you’d then proceed on the process itself:
- Submission of application and payment. The court staff will check the submission you’ve submitted. They’ll consider what you have offered to pay yet may settle on another amount.
- Court contacts you and your creditor. Notification of the proposed request will be sent to you and your creditors from the court. You or your lenders can object to the proposed Administration Order. You’d be given 14 days to object. Your creditor could object due to the following reasons:
- to their inclusion in the administration order
- to the amount they are owed
- to the repayment offer
- to the use of a composition order
- Administration Order becomes legally binding. It could take 4 to 6 weeks for this to be set up. If there are no objections, a copy of your Administration Order will be sent to you, your creditors, and to the Register of Judgments, Orders and Fines. Once this is done, your Administration Order is now legally-binding. In addition, your record will stay on the Register of Judgments, Orders and Fines for six years, and would reflect on your credit file.
End of your Administration Order. An Administration Order goes on until the money you owe is cleared and the court fees are paid. On the off chance that there is a creation request (you will only end up paying back a proportion of the debt that you owe), there will be a period limit on how long you pay for, typically three years. Towards the end of that time, you no longer owe the debts in the Administration Order.
Toward the end of your Administration Order, you can request from the court a “certificate of satisfaction” which costs £15.
With Getting out of Debt UK, we’ll help you determine if an Administration Order is the best option for you, and you’d still avoid economic challenges. Contact us today to arrange a free consultation.