Administration Order for Debts less than £5,000

Richard_S

This seems a less drastic option than Bankruptcy for people with debts of less than £5,000.


http://www.debtadvicebureau.org.uk/explained/administration_orders.html

Regards

Richard

Administration Orders

What is an Administration Order?

An Administration Order is a court order which covers your outstanding debts. Under it you would make a monthly payment to the court, who will then distribute that money on a pro rata basis amongst your creditors.

For ‘administering’ the order, the court will take 10% of your payment as handling fees to cover their costs, which they will deduct directly from your monthly payments.

Whilst the order is in place no creditor included in the order, without the leave of the court, will be allowed to take action against you. In addition, debt collection procedures and letters against you will be stopped.



Who can apply?

To be able to apply you must have:

At least one County Court (or High Court) Judgement issued against;


At least 2 creditors; and

Your total debt must be less than £5,000



Applying

This is done by completing form N92 which is obtainable from your local court office.

On the form you must list all your debts, which must not exceed £5,000. Administration orders are only given to individuals, where there are debts with joint and several liability, you should include the whole debt. Even if finances are shared, couples cannot apply jointly and must make separate applications.

Where a couple each make individual applications for an order at the same time and their is a joint debt, it may be acceptable to divide the debt equally between the two applications.

There is no application fee. The only charges levied byt he court will the 10p in every £1 which they deduct to cover their admin costs.

For employed applicants an Attachment of Earnings Order will be made, unless they specifically request otherwise on form N92. Since many debtors do not want their employers to know of the situation, most debtors prefer not to have an Attachment of Earnings Order.



Payments

If you do not maintain your payments, the court can revoke the order. Your creditors would then be entitled to pursue you for the full amount owed to them.

Should you feel that you cannot afford to pay the amount stipulated in the order, perhaps because of a change in circumstances, you can ask the court to review the order and reduce the payments.



Completion

Once you have paid your debt off under the order, you can obtain a "Certificate of Satisfaction" from the court. You will have to pay a £10 fee for this certificate.

allofadither

Rich, I'm so glad you've posted this info. This may be an answer for my OH's debts. :j

As you already know I'm well and truly BR, but we didn't feel my OH should do the same as he owes a siginificantly smaller amount. I shall investigate further...might take my mind off things whilst I await my fate courtesy of the OR :eek:

Cheers
Dither

Bakeybadoo

I would have preferred to have taken that route but I have no CCJ.

It'll be of good use to someone else though I'm sure.

Richard_S

allofadither wrote: »

Rich, I'm so glad you've posted this info. This may be an answer for my OH's debts. :j

As you already know I'm well and truly BR, but we didn't feel my OH should do the same as he owes a siginificantly smaller amount. I shall investigate further...might take my mind off things whilst I await my fate courtesy of the OR :eek:

Cheers
Dither

Hi Dither,

Wow, that would be a good result; I don't know anything about them apart from the details above and an article I read somewhere else. Would make an interesting thread if your O.H does go that route.

You shouldn't be thinking about "awaiting your fate" with the O.R, it's more a case of "awaiting your liberation" with the O.R. :j

Rich

Richard_S

Bakeybadoo wrote: »

I would have preferred to have taken that route but I have no CCJ.

It'll be of good use to someone else though I'm sure.

Bakey,

I have a cunning plan. I'll lend you £5 and when you don't pay me back I'll issue a county court summons against you. If you refuse to pay you'll get your CCJ. It'd seem strange to be on the other side of the fence.

Rich

rog2

Good advice Richard. :beer:
Obviously an alternative for people with 'relatively' low levels of debt - I emphasise the word 'relatively' since a £5k debt can be just as daunting as a £100k+ debt, when circumstances mean that there is simply no other way of dealing with debts.
Whilst very few of us would actually reccomend bankruptcy for debts of this level, an unscrupulous creditor could petition for bankruptcy if the debt was as low as £750.00, so it's good to know that there is another alternative.

allofadither

rog2 wrote: »

Good advice Richard. :beer:
Obviously an alternative for people with 'relatively' low levels of debt - I emphasise the word 'relatively' since a £5k debt can be just as daunting as a £100k+ debt, when circumstances mean that there is simply no other way of dealing with debts.
Whilst very few of us would actually reccomend bankruptcy for debts of this level, an unscrupulous creditor could petition for bankruptcy if the debt was as low as £750.00, so it's good to know that there is another alternative.

I agree Rog and thought it might be a solution for my OH. But alas, he has only the one creditor so he does not qualify. Can't quite see the logic of having to have at least two creditors, but there we are, rules is rules.:(

Richard_S

allofadither wrote: »

I agree Rog and thought it might be a solution for my OH. But alas, he has only the one creditor so he does not qualify. Can't quite see the logic of having to have at least two creditors, but there we are, rules is rules.:(

Dither,

It might be worth checking with the courts, this is relatively new legislation and if it's not having the desired effect it could well have been amended by now.

Rich

fermi

Richard_S wrote: »

Dither,

It might be worth checking with the courts, this is relatively new legislation and if it's not having the desired effect it could well have been amended by now.

Rich

Yes. I also imagine it is the type of solution that creditors would prefer you not to be aware of.....

allofadither

Richard_S wrote: »

Dither,

It might be worth checking with the courts, this is relatively new legislation and if it's not having the desired effect it could well have been amended by now.

Rich

That's what I like about you Rich...you never give up...never take anything at face value. Whereas me...I'm just one big pushover :rotfl:

Richard_S

allofadither wrote: »

That's what I like about you Rich...you never give up...never take anything at face value. Whereas me...I'm just one big pushover :rotfl:

Aw thanks Dither,

It's all the rejection I had as a child for being the ugly duckling with big buck teeth that smiley actually looks like me :rotfl: that one doesn't I'm not that athletic.

Seriously though, it's very seldom things are exactly as they seem; there's invariably a different agenda, if not a hidden one, and human beings will always deal. No, means you haven't made an acceptable offer yet, Yes means get the bugg3rs to sign quick before they change their mind.

Rich