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.
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.
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.
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.
With it being a legal agreement, some advantages of this process include:
While Administration Orders work for many people, it can have some disadvantages :
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.
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.
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.
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.
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.
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