Administration Order Eligibility
There are many different debt solutions, and they all have different criteria for eligibility. For example, an Individual Voluntary Arrangement (IVA) requires you to have £6,000 of debt, at least two debtors, have a steady income, and be resident in England or Wales. The different criteria can help you to decide which solution is the best solution for you.
An Administration Order is a court order for you to pay all your debts in affordable monthly instalments to the court, who distribute this among your creditors. To be eligible for an Administration Order, you need:
- To have a court judgement that you are struggling to pay. Either from the County Court or the High Court
- To have a total debt less than £5,000
- To have debts to at least two different creditors
- To prove that you are able to afford regular monthly payments
These criteria are also necessary for a Composition Order, which allows a judge to put a time limit on your repayments. Any unpaid debts are then written off.
The most important criteria are the court judgement and the limit on the amount of debt. This means that many people who are in debt are not eligible for an Administration Order. There are many similar debt solutions, however, that could be more suitable. Many could even help to stop creditors taking action that could result in court judgements or orders.
The IVA, as already mentioned, does not require you to have a court judgement, but does require you to have over £6,000 total debt. With an IVA, you pay one, affordable monthly payment to your IVA provider who distributes it among your creditors. Your creditors can no longer contact you, and your remaining debts are written off after 5 or 6 years. A similar solution, called a Trust Deed, is available for residents of Scotland.