Administration order court hearing

When you apply for an administration order, it is usually approved and made legal by the court without the need for a court hearing. However, sometimes, the judge will call a hearing. This usually happens if a creditor objects to the administration order.

A court hearing is not as intimidating as you might think. Many people have found it was not at all what they feared and the judge was very friendly.

Remember, you are not on trial and have not committed a crime. It is only a meeting to help you, the court and your creditors come to an agreement about how you repay your debts.

When is a hearing called?

A hearing will be called if:

• you or one of your creditors object to how much you are asked to pay each month

• you or one of your creditors object to the period of time over which the debt will be repaid

• you or one of your creditors object to a debt being included

• you have told the court about another debt that needs adding to the administration order that you forgot to include on the application form

• the judge has another reason to call a hearing. For example, if they want to clarify any details with you.

If a hearing is called, you should be given 14 days notice. You must go to the hearing. If you don't go, your administration order application will be cancelled. If you can't go, you should write to the court and explain why you can't attend and ask for a new date.

Court hearings by phone or video call

The court will tell you what kind of hearing you’ll have. Check how to prepare for a hearing by phone or video call.

If you're worried about attending, you could take a friend or relative with you.

What to take to the court hearing

The judge may want to ask you questions during the hearing. To help you answer them, you should take the following with you to the hearing:

• a copy of your application form

• a few copies of your recent budget sheet. You should take enough copies for the judge and any creditors that might attend

• your paperwork and letters relating to your debts.

What happens at the court hearing?

The hearing is held before the district judge, usually in the judge's private rooms and won't be open to the public. Your creditors may attend if they have objected to the administration order.

The judge may ask you questions about your financial situation such as your income and spending.

The court may ask you to provide more evidence to prove that the details on your application form are correct. They won't include debts in an administration order unless they are sure they are accurate. If you don't have the right evidence on you, they will postpone the hearing date, known as an adjournment.

If you object about the time over which the debt will be repaid

If you object because you've been asked to make repayments over a period longer than three years, you could ask the court to consider Section 13 of the Courts and Legal Service Act 1990. Section 13 says that administration orders must last no longer than three years. However, this section of the Act is not yet in force and so isn't legally binding on the court. But you could still use it to persuade the court that Parliament thinks three years is a reasonable period. You could ask the court for a composition order. This means some of the debt will be written off.

If the creditor objects

At the hearing a creditor can object to:

• any debt being included in the schedule

• the amount of money you owe them

• an administration order being made

• the terms of the administration order.

The judge will listen to the creditor's objection and may ask them some questions. They may also ask you some questions. For example, if the creditor wants you to pay more, the judge may ask you about your income and spending.

If one of your creditors is arguing that they should not be included in the order you can argue that the objection should not be allowed since:

• one of the main principles of the administration order regime is that all of your debts should be dealt with together

• if one of your creditors is left out of the order you will need to make separate arrangements to pay them and this will affect the amount available for all creditors under the administration order.

The judge will then make a decision about the objection. They will either agree with the creditor and make the changes to the administration order. Or they will reject the creditor's objection and approve the administration order as it is.

If there are no objections

If there are no objections, the court will decide:

• whether any creditor should be excluded from the administration order

• the amount of money you have to pay into court each month. This is calculated by taking into account your personal circumstances as given in the form to the court.

• whether or not to make an attachment of earnings order for the payments. This would mean the payments would be deducted directly from your earnings. If you don't want an attachment of earnings order you should say so on the application form. Or you could also ask for a suspended attachment of earnings order, which would not come into force unless you stopped being able to pay your monthly payments

• the proportion of the full debt you have to repay. If the judge thinks you won't be able to pay all the debt, they will make a composition order. This means you would only have to pay back some of your debt and the rest would be written off.

Next steps

• How the administration order is managed over time

• More about composition orders.