Administration Order

An Administration Order is one of the types of insolvency – similar to Bankruptcy, Individual Voluntary Arrangements and Debt Relief Orders. If you have one, it will remain on your credit report for six years.

Administration Orders are available to those who have a judgment recorded against them, where their debts total no more than £5,000, and where you owe at least two companies. You make an application for an Administration Order on a straightforward form, which sets out your income and suggests how much you can afford to pay, and the court will then decide whether to grant you an Administration Order. You then pay the debt until it is repaid in full, and the court takes a 10% fee for its trouble.

Like other forms of insolvency, the purpose of an Administration Order is to draw a line under your current financial predicament, and to protect you from your creditors pressing you for repayment. Once the Administration Order is granted, creditors are not allowed to pursue you for debt.

One of the big advantages of an Administration Order is that unlike bankruptcy, there is no up-front fee to pay, but remember that the Courts take 10% of your total debts as a fee, so it’s not entirely free, and unlike bankruptcy, you can’t get out of it within 12 months.

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