Troubleshooting administration orders: Common problems

When applying for an administration order, there are some common problems you may come across. Reading this first may help you avoid being declined for basic problems.

• Your debt is too high for an administration order
• You are not solely responsible for your debts
• Council tax arrears
• Community Charge (Poll Tax) arrears
• Magistrates Court fines
• Benefits overpayments & social fund loans

Your debt is too high for an administration order

Administration orders are for debts under £5,000, yet many people unknowingly go above this threshold when applying for an administration order. How? In your application form you must list all your priority and non-priority debts. This means that larger debts, such as mortgage arrears, are included in the total.

To avoid this happening, specify on the form what debts you do not want included within the administration order. These debts you will have to come to separate arrangements with the creditor (and you may be asked to prove these arrangements to the court).

Clearly mark that these debts are not to be included into your total debt you wish to pay via the administration order. If you haven't done this and the court declines you based on the fact you owe over £5,000, you can reapply and make these changes.

Remember that the creditors have 16 days to object to your application and may request to be omitted from your administration order.

You are not solely responsible for your debts

Some of the debts on your applications form may be in joint names. If so you will have to provide their details as well. Even though you have accumulated this debt in with someone else, you have to include the full total of this debt, as you are still considered liable for the whole amount.

How does this cause trouble? Because you are both still liable for this debt, the creditor can still pursue the other person for the debt. The other person responsible for the debt will either have to come to their own arrangement with the creditor, or apply for an administration order separate from yours, providing they are eligible.

If you have a county court judgement (CCJ) for your joint debts, you both are able to use the same CCJ in your administration orders.

The court will look at the amount you propose to pay back monthly as well as your monthly expenses and budget.

Make sure you photocopy the personal budget sheet you submitted with your application so you can refer to it during your hearing and justify how you will afford your payments.

Council tax arrears

Although you may be in arrears, your council tax is ongoing and as a result you must remember to allow for the council tax arrears in your administration order debt, and your future council tax within your expenses in your personal budget sheet.

You are not allowed to include your current council tax in the order, only arrears from previous years.

If you have council tax arrears, this may already be getting deducted from your benefits or wage automatically. These payments will have to stop in order for it to be included in your administration order.

Community Charge (Poll Tax) arrears

Because Poll Tax no longer exists it can not be considered as a bill in your monthly expenditure. Instead, you can include any arrears from Community Charge in your administration order application.

Magistrates Court fines

When you apply for your administration order you can include any magistrates court fines - however the district judge may leave the fine out during your hearing. If this happens, you will still be required to pay the magistrates court fines separately to your administration order.

Benefits overpayments & social fund loans

If you include debts to the Department for Work and Pensions (DWP) such as benefits overpayments and social fund loans, they may request not to be included in your administration order. If they don't you may find that judges often dismiss these debts in your order and your deductions will continue.

If you have any further questions about administration orders, contact the Debt Advice Trust for further information.