What is an Administration Order?
March 22, 2018
If you live in Northern Ireland and are struggling with problem debts then you may be considering entering into an Administration Order as a way to take back control of your finances.
An Administration Order is a formal debt management solution which is operated by the Enforcement of Judgements Office (EJO). It allows you to make one single affordable monthly payment to the EJO who then share it out between your creditors for an agreed period of time.
As it is a legally binding agreement, during the term of an Administration Order your creditors are no longer able to contact you regarding your debt. This means that the often stressful letters and phone calls will stop.
Am I eligible for an Administration Order?
The EJO will only grant an Administration Order if:
- Your debts total no more than £5,000
- You have at least two creditors of which one is an unpaid County Court Judgement (CCJ)
- You have enough steady income to make regular repayments once your priority bills have been taken into account.
How do Administration Orders work?
If you believe that an Administration Order could be the right way for you to handle your debts then you should apply directly to the EJO. You will need to fill out a N92 form, which is available from the EJO. This should include details of:
- Your current debts
- Your outstanding CCJ
- Your regular income
- Your necessary expenditure
The EJO will then take all of these details into account and decide how much you can afford to pay back to service your debts each month/week. You will then pay this amount to the EJO who will distribute it to your creditors. In some cases you will be required to attend a hearing to decide this amount, but in many cases the EJO will make a decision without this.
You will keep making these repayments until your debt is completely cleared. In some circumstances the EJO may judge that you cannot afford to fully repay your debt or that it would take you too long, in which case they will ask you to repay only a portion of your debt. This is called a Composition Order and usually sets a date for the Administration Order to end after three years, after which time any remaining debt is written off.
How much does an Administration Order cost?
There is no upfront fee to pay when arranging an Administration Order; however the EJO will take a percentage of each of your monthly payments to cover their costs. This is usually around 10% of your total debt; therefore if you had a debt amounting to £3,000 you would pay an extra £300 on top.
What if your circumstances change and you can’t keep up repayments on an Administration Order?
If your circumstances change and you find that you are struggling to keep up with the repayments on your Administration Order then you can contact the EJO and ask for the payments to be reduced or for the order to be cancelled. You will need to provide proof of your change in circumstances and you may be required to attend a hearing.
Also if your situation changes for the better and you are able to afford to make higher payments towards your Administration Order then you must tell the EJO and your payments may be increased.
What debts can I include in an Administration Order?
You can include all of your unsecured debts such as personal loans, credit cards, store cards and payday loans in an Administration Order, and in some cases you may be able to include secured loans such as hire purchases. In most cases however you will not be able to include council tax arrears, criminal fines, child maintenance arrears or HMRC debts, although the monthly payment amount of your Administration Order should take these into consideration and leave you with enough money to pay them.
Are there any alternatives to Administration Orders?
Administration Orders are actually very rarely used in Northern Ireland these days, often due to the cost attached to them and the availability of other debt management solutions that may be more suitable. These could include:
If you are a resident of Northern Ireland and are struggling with your debts, then you may find that an Administration Order is the right solution for you, however any of the above debt management processes could actually be more suitable. Take the first step to taking back control of your finances today and contact Northern Ireland Debt Solutions. Our knowledgeable advisors will take the time to understand your situation before explaining the options that are open to you and helping you along every step of the way to a debt free future.
FREE and Cheap Christmas Events for Children, Families, and Individuals across Northern Ireland 201816th November 2018
Get that festive feeling for less by checking out our top picks of the budget-friendly Christmas events happening across Northern […]
Northern Ireland has a unique system for ensuring compliance with court orders. If the civil courts in Northern Ireland issue […]