How an administration order works
First, you fill in an N92 court form listing your income, expenses and debts, and take this to the court.
The court may ask you to attend a hearing where a judge will decide whether to grant an administration order and how much your payment will be. If your case looks straightforward the court may make a decision without a hearing.
The payment you’d make each month to the administration order is the amount you have left after paying for all your priority debts, like essential bills and living costs.
If the administration order is agreed you’ll make one payment to the court instead of paying your creditors directly. The court will then arrange to pass the money on to your creditors.
In England or Wales, if you’re working, the court may take the payment straight from your wages using an attachment of earnings.
There’s no court fee to set up an administration order, but the court will keep 10% of each payment you make.
If you can only afford a small amount towards your debts, you can apply for a ‘composition order’. This sets a date for the administration order to end, often after three years. When you reach this date your creditors write off any remaining debt. The court will only consider this if your payment won't clear the debts in a reasonable amount of time.
If the court doesn’t set a composition order, your administration order will continue until your debts are paid in full.