If you’re facing financial difficulties, there are various debt solutions available to you depending on your specific set of circumstances. One potential solution is an administration order, which can be put in place to prevent further creditor action while you make payments to court.
Once the order is in place, the listed creditors will need to get the court’s permission to take any action against you and you should no longer receive any communication from creditors or debt collectors.
To help you decide if administration orders are the right course of action for you, here are some FAQs about what they are and what the process involves. If you need any further administration order help, get in touch with us today.
What Is An Administration Order?
Administration orders can be implemented by the courts to prevent creditors from taking further action against you while you pay off your debt. Under the order, you are required to make a single payment each month, with the money divided among your creditors on a pro-rata basis.
What Are The Advantages Of An Administration Order?
There are various benefits associated with administration orders, everything from saving you time and trouble to cancelling any interest and other charges so they’re not added to the debt. There are also no upfront fees to pay for these orders and the courts will take a handling fee of 10p per every pound you pay over the lifetime of the order.
Who Can Apply For An Administration Order?
In order to be eligible for an administration order (1), you will need to have at least two debts, have at least one CCJ or High Court judgement against you and have less than £5,000 worth of debts in total.
What Happens Once I’ve Applied?
Once the application form has been accepted, your creditors will be informed. They then have 16 days to make any objections known to the court. They can also ask to be left out of the administration altogether. You will need to attend a hearing while the order is being made.
How Long Do Administration Orders Last?
Typically, administration orders will continue until all the debts are settled in full. You can apply to amend the terms of the order if there’s a change in your financial circumstances and creditors can ask for payments to be reviewed. Details of the order will remain on your credit report for six years.
What Happens If I Don’t Keep Up With Payments?
If you fail to make your regular monthly payments, the court can cancel or revoke the administration order. If you can no longer afford your payments, make sure you get in touch with the court as soon as you can. If the order is revoked, your creditors will be able to pursue you for what is owed once again.
If you are struggling with debt at the moment because of cost of living challenges, get in touch with us today to see how we can help.
References:
- https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/administration-orders/setting-up-an-administration-order/applying-for-an-administration-order/
