How long does an Administration Order last?
An Administration Order is a debt solution for people who already have a court judgement against them. If you apply for an Administration Order, the court would combine all your debts into one monthly payment which is paid to them and distributed among your creditors. This makes your debts more affordable, easier to manage and stops creditors contacting you.
The Length of Time
The length of your Administration Order is decided by the court when you apply. The court assess all your financial information in order to decide:
- The amount that you pay each month
- The total amount that you have to pay
- The length of time that you will make payments
This means that the length of time that you will be making repayments as part of the Administrative Order varies depending on your total debts and your income. For example, if you are ordered to pay a total of £2000, and can afford payments of £150, you will make payments for 14 months. This means you would pay your debts in just over 1 year.
If you cannot pay off your debts within a ‘reasonable time’ then you may be able to ask the judge for a ‘composition order’. The definition of ‘reasonable time’ can depend on the judge and circumstances. However, guidance suggests that three years is a good general guide. A Composition Order puts a time limit on your repayments, after which the remaining debts will be written off.
For example, an Administration Order on a debt of £4,000 when someone can afford payments of £50 will take 80 months, which is over 6 and a half years. This might inspire you to ask a judge for a Composition Order, and, if accepted, the judge could put a limit of 48 months, which is 4 years of payments. After these four years, the remaining debt of £1,600 is written off.
Ultimately, the judge decides whether you can be considered for a composition order. However, creditors can object and if they do, a hearing will be called. You must attend a hearing that is called as it is a chance for you and your creditors to state your cases. You should be given at least 14 days’ notice of any hearing.
Find out more about Administration Orders.