How an administration order is set up
To get an administration order, you must fill in an application form and hand it in to the court.
This page tells you how an administration order is set up after you've handed in your application form.
Completing the applicationFor information on completing the application and how to hand it in, see Applying for an administration order.
Step one: court staff consider application and payment
Once you have handed in your application, the court staff will look through the details you've provided. They'll consider what you have offered to repay but may decide on another amount.They will look at your financial situation and your debts and work out if all the debt can be repaid within a 'reasonable time'. A reasonable time is usually three years. If so, they will decide how much you'll have to pay to the court each month and for how long.
Step two: court contacts you and creditors
The court will send you and your creditors a notice of the proposed order. This notice will provide details of the proposed order. It will state what debts are included in the administration order and how much it is proposed that you'll repay each month and for how long. You or your creditors can object to the proposed administration order. For example, you might think the monthly payments are too high. You and the creditors have 14 days to object.
Creditors may object:
- to their inclusion in the administration order
- to the amount they are owed
- to the repayment offer
- to the use of a composition order.
If you or any of the creditors object, there will be a hearing that you will have to attend.
Step three: administration order is made legally-binding
If there are no objections, a copy of the administration order will be sent to you and all creditors. The order will be registered in the Register of Judgments, Orders and Fines. At this point, the administration order becomes legally binding on you and all your creditors included in the order.
If there are no objections, it usually takes four to six weeks for an administration order to be set up.
When an administration order has been made, a listed creditor is allowed to ask the district judge of the county court to seize and sell any of your property which is worth more than £50. However, this almost never happens in practice.
If the debt can't be paid off within a 'reasonable period'
If the court thinks the full amount of the debt can't be paid off within a 'reasonable period', the case will be referred to a district judge. The judge may either propose:
- a full administration order to be paid over a longer period
- a composition order
- a hearing. If a hearing is fixed, 14 days' notice of the date must be sent to you and your creditors.