Administration Orders
Administration Orders (also known as Admin Orders) are applicable to sole traders that have debts of less than £5,000. The process allows business debts to be pooled together, allowing the insolvent sole trader to make a single monthly payment that is then divided amongst creditors.
This helps in alleviating creditor pressure and buys valuable time for a business to get its affairs in order and be in the best possible position before undertaking the next step in their business recovery.
The objectives of an Administration Order are to:
- Achieve the best possible price for a company’s assets.
- Ascertain property values in orders to make distribution more simple.
Who Qualifies for an Administration Order?
To qualify for an administration order you must satisfy certain stipulations such as:
- Having total business debts less than £5000.
- Having at least two creditors.
- Being an insolvent individual, not a Business.
How do I undertake this process?
The first step in the process is to procure an N92 form from your county court, where you will be asked to fill in the details of your debt. The administration order process is overseen by a licensed insolvency practitioner that will act as the administrator. If there are debts shared with a partner, you will still be required to detail the debt in its entirety.
What are the advantages of an Administration Order?
- Sole traders need to make only one payment each month, keeping things as streamlined and simple as possible during a stressful time.
- Once the order is put in place, creditors cannot take any action against the you during recovery.
- All debt collection hassles and letters will be paused.
- There are no upfront fees to pay the court. Instead a rate of 10 pence is taken out of every £1.00 paid during the administration order.
Information about Payments
If the individual cannot keep up with payments, the court may cancel or revoke the administration order. This means that creditors can resume their pursuit of repayment. An administration order lasts until all debts are paid in full and because they may be paying only a small amount to creditors, they could be paying the debt fees for years.
The court can be asked at any time to review the payment orders and reduce the amounts if there are further financial difficulties. Upon completion of the administration order, a Certificate of Satisfaction can be obtained from the court, which comes at the cost of £10.
For more information on how we can help you with Administration Orders, please call us on 0845 468 2395 or visit our contact page.
