If you are in debt and you are starting to feel overwhelmed by the letters, phone calls and threats of legal action from your creditors, then an Administration Order (or Admin Order) may be an appropriate way to help you get in control.
An Admin Order allows you to make a single monthly payment to a debt administrator, who then distributes the money to your creditors. Administration Orders also prevent your creditors from placing any further demands on you, which means the stressful letters and phone calls will stop.
The advantages of an Administration Order
- Once the Administration Order is in place your creditors can’t take any action against you.
- You make one simple monthly payment to the administrator.
- The payment you make is based on what you can afford.
- Debt collection procedures and letters against you will be stopped.
What you need to consider when applying for an Administration Order
- A creditor is allowed to object to an Administration Order and request that they are excluded from the arrangement, but the court may refuse their request.
- Your employer may be informed that you are using an Administration Order to pay off your debt, so you need to consider whether this will affect your relationship with them.
- Once an order has been issued for the administration of your estate, you may not incur further debts or raise credit without explaining to the other party that you are under an order of administration.
- While an Administration Order is in force, no creditor has any legal remedy against you or your property for collecting money owing, subject to some exceptions, without the permission of the court.
Keeping up your monthly payments
An Administration Order lasts until all your debts are paid off in full. So remember that if you are only paying a very small amount to your creditors, you could be paying your Administration Order for years.
If you can’t keep up your monthly payments, the court may withdraw the Administration Order. This means that your creditors are then entitled to ask you for the full amount you owe them.
If your circumstances change and you can’t afford to pay the amount in the order, you can ask the court to review the order and reduce the payments. Special allowances are made for certain circumstances, such as losing your job or a close family bereavement.
SALOME LAWSON, HEAD OF DEBT ADMINISTRATION
THE DEBT ADMINISTRATION DEPARTMENT