Administration Order

What is an Administration Order?

An Administration Order is a legal court order that requires you to make a single monthly payment to the court. The court staff then distribute this money to your creditors on your behalf. While an administration order is in effect, creditors are prohibited from taking any further action against you.

What is a Composition Order?

If you find that you are only able to pay a small amount to your creditors, your Administration Order could last for many years. 

A 'Composition Order' can help prevent this situation - it allows you to pay only a portion of your total debts; typically an amount that you can afford over a period of three years.

The criteria

To be eligible for an administration order, you must meet the following criteria:

• Have debts totalling less than £5,000
• Have one or more county court or High Court judgments against you
• Have two or more outstanding debts

Benefits of an Administration Order

Here are some of the benefits of this option:

1. It is legally binding, meaning that all creditors included in the order must adhere to it; they can only pursue you for payment if they obtain permission from the court.
2. There is no upfront fee required to set up the order.
3. You make just one monthly payment to the court, simplifying the process.
4. All your debts are managed together under the order.
5. Administration orders are typically time-limited and usually last no more than three years.
6. Some of the debt may be written off.

When an Administration Order may not be right for you

An administration order may not be suitable if:

• Your total debts exceed £5,000.
• You do not have an unpaid court judgment.
• You only have one creditor.
• You have no surplus income to contribute toward payments.

Other considerations

When determining the best debt solution for your situation, it's important to consider the following factors:

1. Costs involved
2. Impact on your job
3. Impact on your home
4. Impact on your belongings, savings, and pension
5. Lasting power of attorney
6. Impact on your credit rating