An Administration Order is a formal and legally binding debt solution between the court and the debtor to pay back their debts over an agreed period of time.
It’s important to remember that no debt solution is perfect and there is no ‘one-size-fits-all,’ which is why we recommend speaking to one of expert debt advisors, completely free of charge, about your options and next steps.
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What is an administration order?
An administration order is an agreement between you and the court to pay back your debts over an agreed period of time. Administration orders aren't issued very often as the qualifying criteria is quite specific and most people find that a Debt Relief Order (DRO) is better suited and more affordable for them.
Is an administration order right for me?
To qualify for an administration order you must have two or more debts that do not total more than £5000 and you must have at least one unpaid County Court Judgement (CCJ) or High Court Judgement. Administration orders are only available for residents of England, Wales and Northern Ireland.
Is an administration order legally binding?
An administration order is a formal and legally binding arrangement. Your creditors will be prevented from taking further action against you once the order is agreed.
How much of my debt will an administration order write off?
In some cases, if your income is so low that you cannot afford to repay your debt in a reasonable amount of time, it’s possible to apply for a Composition Order which will limit your repayment term to 3 years and any debt that you haven't managed to repay in this time will be written off.
Administration Order Pros
An administration order allows you to put forward, through an officer of the court, a realistic and affordable repayment plan to your creditors.
Creditors can’t take further action against you once the order is granted.
You may be able to avoid selling your assets if a spouse, partner or relative is able to buy your share of its value.
If your income is so low that you cannot afford to repay the debt in a reasonable time, it’s possible to apply for a Composition Order which will limit your repayment term to 3 years and any debt you cannot afford to pay in this time is written off.
Administration Order Cons
The court may not grant the order as it is subject to individual circumstances.
An administration order will be recorded on your credit file for 6 years, making it difficult to obtain further credit during this time.
Your administration order will appear on the Register of Judgements, Orders and Fines.
The court supervising the order will keep 10% of each repayment you make.
You may be asked to sell assets in order to repay your debts.