Administration order

Contents

What is an administration order?

An administration order can be made by the County Court in England & Wales or in by the Enforcement of Judgments Office (EJO) in Northern Ireland if you have 2 or more outstanding debts totalling not more than £5,000, one of which being a judgment debt. It lets you pay a specified regular amount into court or to the EJO for distribution amongst all your creditors on a pro-rata basis.

While the administration order is in place, it stops those creditors listed in the schedule to it from taking further action against you.

In England and Wales, the administration order will remain in place until all the scheduled debt is paid, unless a composition order is made. A composition order allows you to pay off less than the total amount of the scheduled debts. This order is appropriate where you will not be able to pay off all your scheduled debts within a period of 3 years.

(In Northern Ireland the EJO may make provision under an Administration Order for you not to repay the full amount of debt if they think that is just.)

An administration Order will negatively affect your credit rating and could make it harder for you to open bank accounts or obtain loans

What are the benefits of an administration order?

An administration order gives you the following benefits:

  • There is no fee payable when applying to court or EJO for the order. The court recovers its costs from the money you pay at the rate of 10p in each pound. The total costs can't be more than 10% of the total debt.
  • The amount and frequency of the payments will be set at an affordable level.
  • The court or EJO will make pro-rata distributions to the scheduled creditors and deal with them so that you no longer need to.
  • The scheduled creditors can't enforce their debt or apply for your bankruptcy without the court's or EJO's permission.

Applying

Who can apply?

You can apply for an administration order if you have total debts of less than £5,000. You must have at least 2 creditors and one of the debts must be a county court or High Court judgment. You must be unable to pay the debt immediately in full but must show that you can afford to make regular repayments.

How do you apply?

England and Wales

You apply by first completing an 'Application for an Administration Order' Form N92. In this form you will give information about all your creditors and the amounts owed to them, details of the judgment debt and details of your total income and expenditure.

In Part C of Form N92 you can ask the court for a composition order, although the final decision will rest with the court. A composition order is where the court orders that you only need to repay part of your debts. The court would make this order if it is clear from your financial circumstances that you will not be able to pay off the debts in full by making regular payments over a reasonable period of about 3 years.

You must verify the truth of the information supplied in Form N92 by either swearing on oath or by affirmation when you sign it in front of a court officer at your local county court. Documentary evidence of the information given in the form must be included.

Northern Ireland

You apply directly to the EJO. You must be able to show to the EJO that you are unable to pay your debts that are under £5,000 and one of which must be a court judgment. The application is made in form 11 (this can be obtained from the EJO) which you must complete fully to detail your debts, creditors, income and outgoings.

Check the website for the Enforcement of Judgments Office for their contact details.

After the application

England and Wales

The court officer will decide whether an administration order should be made based on the information supplied in the application form.

If you meet the requirements for an administration order and have the means to pay off the debts in 3 years, the court officer will put an administration order in place. The court officer will calculate the amount and frequency of the regular payments you must make into court. The court officer will send a notice with the details of the proposed order, to you and each of the scheduled creditors.

The details in the notice include:

  • the list of debts included in the proposed administration order;
  • the frequency and amount of your proposed payments into court; and
  • a copy of your application.

You and any of the creditors may object to the proposed order within 14 days from receiving the notice. You may object for example if the required payments into court seems too high. The creditors may object to:

  • the making of an administration order;
  • the proposed rate of re-payment; or
  • the inclusion of a particular debt in the order.

If there are no objections within the time allowed, the court officer will make the administration order as proposed. If there are any objections they will fix a date for a court hearing. The court officer will give you and all creditors at least 14 days' notice of the date of hearing.

If the court officer finds that your income is not enough to fix a rate of payment that will allow repayment of the debts within a reasonable time, they will refer the application to the court. The court will either fix the rate of payment to allow for repayment over a longer period, or will allow part payment in a composition order. It this is not possible, it will ask the court officer to fix a date for hearing of the administration application. The court officer will give you and all creditors at least 14 days' notice of the date of hearing.

Northern Ireland

Once your application is received the EJO will appoint a day for hearing when your application will be considered. They will serve a Notice of Hearing on you and each of your creditors not less than 8 days prior to the hearing. If any of your creditors wish to object to any of your listed debts being included in the order, then they must at least 4 days prior to the hearing, lodge with the EJO a Notice of Objection and send a copy to you and the creditor they are objecting to.

The case will be heard by a High Court Master. The Master will decide if it is appropriate for an order to be made, and if so if they are including all the debts listed in your application. Sometimes they may ask further information to 'prove' a debt is true and accurate. At the hearing the Master can hear evidence from you and any of your creditors. If the Master grants the order, then the EJO will send a copy to you and each of your creditors. They will also send notice of the order having been made to any court where you have a judgment or pending action in relation to one of the debts in your order.

After the order is made, any creditor that was not notified may raise an objection. If you failed to include a creditor in your original application, then they can seek inclusion via the EJO. The EJO will notify you if they receive any such requests. If you don't object, then they will be included in your list of creditors. If you do object, then the matter will be referred back to the Master for adjudication.

The debtor's responsibilities

England and Wales

Once the administration order is in place you must keep up the regular payments into court. If you default the court can make an attachment of earnings order or cancel the arrangement.

Northern Ireland

You must comply with the terms of the order. The EJO may if you are employed, get an attachment of earnings order (i.e. they will take the money directly from your employer prior to them paying you your wages).

The Chief Enforcement Officer is responsible for the conduct of your administration order. They can apply to the Master for the discharge of the order if you don't comply with it. So, if you experience difficulties in paying the instalments you should contact the EJO immediately. The Master has the power to suspend an order or reduce the instalments if you are in genuine difficulty in making payments.