An administration order (AO) allows you to make one affordable payment to the county court each month. This money is then passed to the creditors.
An administration order (AO) allows you to make one affordable payment to the county court each month. This money is then passed to the creditors. While you are making payments each month under the AO the creditors must accept the payment they are getting through the court. This means telephone calls and letters asking you for payment should stop.
To get an AO you have to have:
- At least one unpaid County Court Judgement (CCJ),
- At least two different debts, and
- No more than £5,000 worth of debt.
If it looks as though it will take more than three years to clear the debts under the AO, the court can make a composition order. This would limit how long you have to pay the debts back for, usually to three years.
There are no up front fees to pay for an AO but the county court does take 10p in every £1 you pay for administration costs. To apply for an AO, you have to fill in an application form called an N92 and send it to the court. You will not normally have to attend the court or answer any further questions.
You can pick the form up from your local county court or download it from the HMCTS website.
Important points to remember about an AO:
- You can only apply for an AO if a creditor has taken you to court and obtained a CCJ against you.
- You need to fill in an application form. You could ask your local advice agency for help with this.
- It is free to apply.
- As long as you make payments under the order, the creditor can’t take any further action against you. This can relieve a lot of stress and worry.
- Your credit rating would have already been affected by having a CCJ against you.
- What is breathing space?
- What is a mental health breathing space?
- Priority and non-priority debts
- Bank accounts and debt
- Drawing up a budget sheet
- Negotiating reduced payments
- Free Debt Management Plans
- Administration Order
- Debt Relief Order
- Individual Voluntary Arrangement
- Will I be 'blacklisted'?
- Write Offs
- What can creditors do if I don't pay?
- How to deal with debt collectors in the UK
- Should I tell creditors about my mental health?
- Getting help from a specialist adviser