An informal arrangement where a court agrees that a person’s debts of up to £5,000 can be paid in part, and by instalments, based on certain conditions. Stays on your credit file for 6 years, alongside all the loans and credit which were included in the Administration Order. Normally used to protect a company experiencing short or medium term financial problems from its creditors.
A court order is issued that forbids any form of legal or insolvency action without the court's permission. An application to the court for an administration order may be made by the company, the directors, a creditor or any combination of them. The Enterprise Act 2002 amended the Insolvency Act 1986 to provide an out of Court process to appoint an administrator to the holder of a floating charge or the company or its directors. This is considerably cheaper and simpler than the previous system, which involved an application to Court.
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