While applying for an administration order, you might come across several obstacles. Here are 6 most common problems faced by people while applying for administration orders in UK. If you have any specific question or problem, please write a comment. We will be happy to advice.
1. High debt amounts:
Administration Orders deal with credit debts but in reality the administration order form instructs to list all your debts. This can create problems because if you have mortgage arrears or other high amount priority debts, it can make your total debt look more than £5,000. So be specific on the form about what you do not want to include. For these debts, you will have to go for separate arrangements with the creditor. If you do not specify the debts you want to exclude from administration order, your application might not be granted by the court. However, you can also reapply to make changes. It is also essential to state that you are trying to come to separate arrangements with your creditors. You can get copies of letters from your creditor as a proof.
2. Jointly owned debts or joint and several liabilities:
In this situation, you need to provide details about the other person who owes money. You also need to put in your total debt amount. When you borrow money with another person, you are liable for the whole amount and not just half of it. This is called “joint and several liabilities”.
However your creditors can still go to the other borrower even though you get an administration order. In this case, the other person also needs to apply for administration order. At the same time, he can apply only if he has a County Court Judgment and debts less than £5,000. The other borrower can also make separate arrangements with the creditors. Even if owe debts jointly, you will need to apply for this order separately. The court will never grant joint applications.
Make sure that you carry a copy of your personal budget sheet to the hearing.
It may be that your application is refused without a hearing or despite a hearing your application has not been accepted by the court. You can write to the court by addressing your letter to the Court Manager.
3. Council Tax Arrears and administration order:
Council Tax is paid in instalments over 10 months. Council Tax arrears for previous years can be included in an administration order. The current year’s council tax cannot be included. It can be taken into account only if you have missed a lot of payments and the Council has informed that you have lost your right to pay in instalments. Once your council tax arrears are included in the administration order, deductions from your benefit for payment arrears will cease. Even payments drawn from your wages to pay council tax will also stop.
You can also add your arrears from community charge in your administration order. Community charge or poll tax is no longer an ongoing bill.
4. Magistrates’ Court Fines:
In your administration order you should include any magistrates’ court fines. This should be done while you are applying. However, the district judge most often leaves the fine. You should remember to pay the fine to the magistrates’ court until a conclusion is reached that it can be included in the administration order. This will prevent the magistrates’ court from taking any action against you. Make it a point to include these payments to the magistrates’ court in your “Regular Expenses” on the Administration Order.
5. How to deal with Social fund loans and benefit overpayment in administration order?
Do you have a weekly deduction from your benefit for a social fund loan or overpayment of benefit? In such a situation, the Department for Works and Pensions (DWP) will keep on deducting and will raise an objection if you include these arrears in administration order. Recently it was decided by the court that even social fund loans and benefit over payments are not ordinary debts and must be paid off. You should include a social fund loan while applying for an administration order though it is common for the district judge to leave out these debts. However, if you are no longer on benefits, you must include your social fund loan and benefit overpayment in the order.
6. What if I cannot afford the payments I have been ordered by the court?
It may happen that you fail to make the agreed payments. For this you can apply to change the amount in case the amount is too high as set by the court. Go ahead and get a N244 form which is a general county court application form. There is no fee charged for making this application. This is included in the deductions made to cover fees during the processing of administration order. If you are charged a fee, you can complain to the court manger. You can get it from your court office. You need to explain that you want to apply for a change in payments under your administration order. You can also get your personal budget sheet as a proof. After this the district judge will call for a hearing in private rooms so as to change the terms of the order. If you fail to keep up the payments as agreed, your order can be cancelled or revoked by the court. Once your order is revoked, your creditors can once again get back to you for the debts you owe them.
