Administration Orders - Pros & Cons

Administration Orders to Stop Creditor Harassment for Personal Debt Under £5,000

An Administration Order provides full legal protection with respect to personal debt under £5,000. Find out how to prevent creditor harassment.

An administration order can be applied for when personal debts are over £5,000. The debtor will need to have a minimum of two creditors and have at least one County Court Judgement or CCJ registered against their name. A pre-agreed monthly payment is made to the court and this is paid to those who are owed money. No further legal action or creditor harassment can take place.

Advantages of Administration Orders

• No further legal action. Once agreed, creditors cannot take legal action to collect any personal debts documented in the agreement without full permission from the court.
• Flexibility. Should financial circumstances change for the worse, debtors can apply to the court in order to agree a more affordable repayment schedule.
• Interest and charges. Further interest and charges cannot be applied once in-place.
• No up-front fees. No fees are charged in advance, although 10% of all monthly contributions are taken to cover administrative costs.
• No creditor contact. The court makes any repayments on the debtor's behalf so there will no further creditor harassment.

Disadvantages of Administration Orders

• Creditor objection. A creditor can object to an administration order and request that they are excluded from the arrangement. However, the court has full discretion to refuse their request.
• Not maintaining payments. Should the debtor fail to maintain the agreed monthly repayment schedule, the court may choose to revoke the administration order. This means that the creditor harassment is now possible with regard to the collection of any outstanding personal debts.
• County Court Judgements (CCJ's). In order to be accepted, a debtor will need to have a minimum of one County Court Judgement or CCJ registered against their name.
• Maximum personal debt. The amount owed cannot cumulatively amount to greater than £5,000.
• Employer awareness. An administration order is most likely to be fulfilled with an earnings attachment. This means that the employer will be aware which could be awkward if working for a small, closely-knit company.

An administration order can help someone overcome personal debt whilst preventing further creditor harassment. Individuals with at least one County Court Judgement (CCJ) registered against their name can conveniently make payment via an earnings attachment. No further interest or charges can be applied to the amount owed.

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