Composition Order means that you only have to pay part of your debts over a three year period
Composition Order, pay partial debt only, once the Composition Order is granted, every pound you owe, you will make36 monthly to clear your debt in three years
You should apply for a Composition Order at the same time as you apply for your administration order. In Part C of N92 application form, please make
sure that you are considered for Composition Order. The court should automatically consider whether Composition Order would be appropriate for the applicant.
If your application is not agreed, you may have to go to county court for a hearing with a district judge. The applications are not rejected without a hearing.
Payment against administration order could go on for years however the district judge can make a Composition Order to make sure that this does not happen. It means that you only have to pay part of your debts over a three year period.
You will need to work out how much you can afford to pay each month before applying for a composition order. You should have this information if you have already filled in the form Assess Your Financial Situation on this website to compared with how much you owe.
Once the Composition Order is granted, every pound you owe, you will only pay a percentage off your debt. This is calculated as follows.
The total amount unsecured debts you owe.
Let us say your debt totals to £4500.00.
You have three creditors and can pay minimum of £5.00 to each creditor. Total 15.00 a month If you pay £15.00 a month to clear your debt of £4500.00 it will take you 300 months. (4500 divide by 15 = 300) (300 divide by 12 months = 25 Years).
To clear the debt in three years equals 36 monthly payments (12months x 3 years =36 months). The amount you intend pay is £540.00.
You need to deduct 10% from £540.00 payable as handling fee to the court equals £54.00.
The amount you therefore need to pay your creditor is £486.00
To calculate the percentage you need to multiply £486 by 100. This equals to £48600.00
The amount you would pay will be 48600 divide by 4500 = 10.8 pence in a £.
Round up this figure to the nearest pence would 11pence. You therefore offer to pay to the extent of 11p in the £.
The result is that for every pound you owe, you will only pay a percentage of this off your debt. In the example shown 11 pence is paid for every pound owed.
If you have not applied for a Composition Order you can apply for one separately even after your administration order is up and running. There is no fee for this application. Please use a form N244 to apply for a Composition Order.
Payment against administration order could go on for years however the district judge can make a Composition Order to make sure that this does not happen. It means that you only have to pay part of your debts over a three year period.
You will need to work out how much you can afford to pay each month before applying for a composition order. You should have this information if you have already filled in the form Assess Your Financial Situation on this website to compared with how much you owe.
Once the Composition Order is granted, every pound you owe, you will only pay a percentage off your debt. This is calculated as follows.
The total amount unsecured debts you owe.
Let us say your debt totals to £4500.00.
You have three creditors and can pay minimum of £5.00 to each creditor. Total 15.00 a month If you pay £15.00 a month to clear your debt of £4500.00 it will take you 300 months. (4500 divide by 15 = 300) (300 divide by 12 months = 25 Years).
To clear the debt in three years equals 36 monthly payments (12months x 3 years =36 months). The amount you intend pay is £540.00.
You need to deduct 10% from £540.00 payable as handling fee to the court equals £54.00.
The amount you therefore need to pay your creditor is £486.00
To calculate the percentage you need to multiply £486 by 100. This equals to £48600.00
The amount you would pay will be 48600 divide by 4500 = 10.8 pence in a £.
Round up this figure to the nearest pence would 11pence. You therefore offer to pay to the extent of 11p in the £.
The result is that for every pound you owe, you will only pay a percentage of this off your debt. In the example shown 11 pence is paid for every pound owed.
If you have not applied for a Composition Order you can apply for one separately even after your administration order is up and running. There is no fee for this application. Please use a form N244 to apply for a Composition Order.