Administration Order

An Administration Order is a legally binding agreement that has been issued by a county court.

An application is made to your local county court who will decide on whether to grant your order. If it is, all creditors are declared on the application and are notified. One monthly payment is then paid to your local court which is then paid out to those you own money to.

An Administration Order is added to the Register of Judgements, Orders and Fines, where it will be visible for six years.

Is an Administration Order a suitable option?

When debt is below £5,000, and you want to have a legal precedent in place to pay back debt, an Administration Order may be a suitable option.  Personal debt affects everyone differently. We recommend familiarising yourself with the most common personal debt options to see which would work best for you.

How does an Administration Order work?

Administration Orders will vary depending on where you live. Without getting into precise details, an Administration Order works by you taking an application to court after receiving a court judgment. The application states that you will adhere to a contract whereby you pay an arranged monthly fee to the court, who then passes it on to your creditor.

The idea behind this order is to ensure you can pay your debt in full by an arranged date without fear of your creditor taking legal action against you.

What happens if an Administration Order is revoked?

Sometimes you may find an administration order revoked. This means that the order has been cancelled. Your creditor may ask for the debt to be repaid at a higher level or in full. In some cases, the creditor may seek costs incurred through an interest in the debt or the possibility of court action.

In most cases, a revocation can be avoided by informing the court of issues making payment as soon as it is known. It would result in the court having to carry out a formal review.

Advantages of an Administration Order

With it being a legal agreement, some advantages of this process include:

  • One monthly payment which is easier to manage than multiple payments
  • Creditors are unable to take any action against you without permission from the court.

Disadvantages of an Administration Order

While Administration Orders work for many people, it can have some disadvantages :

  • An Administration Order is only available for those who have at least one court judgement against them and have under £5000 of debt.
  • Not making payments could make the court apply an ‘attachment of earnings order,’ which will allow them to cancel your arrangements or take the money from your wages.
  • There are costs payable of up to 10% of your debt levels.

Understanding what can and can’t be paid with an Administration Order

Typically, a court would include as many debts as they deem appropriate in an Administration Order. If an individual had specific fines or tax arrears, it might be excluded from the order.

Can I get an Administration Order in Scotland?

No. Administration Orders are only in place in England, Wales & Northern Ireland. In Scotland, anyone with debt up to £5,000 would typically have a Debt Arrangement Scheme in place to pay creditors without direct contact.

Does an Administration Order affect your credit rating?

When an Administration Order is made, it has to be registered on the Register of Judgments, Orders and Fines, where it stays for six years. When the debt is paid, the court you’ve gone through will mark the debt as closed. After six years, the record is removed, although some credit companies will have it on their records.

In cases where this previous record limits attempts to get credit, applying for a Certificate of Satisfaction may help.

What alternatives are there to Administration Orders?

If you feel that your debts could be considered “non-priority”, it may be worth applying for a Debt Management Plan. It is non-legally binding and is more flexible on your end.

Get advice on Administration Orders

Talk to advisors at Hillcrest Finance today if you’d like to learn more about Administration Orders.

Phone lines are open every weekday from 8 am on 0141 478 0862. You can also get in touch via WhatsApp.

Get in touch with us about an Administration Order today