WHAT IS AN ADMINISTRATION ORDER?
An Administration Order is granted when a debtor is unable to meet his/her financial commitments.
His/Her expenses exceed his/her monthly income. As a result of this he/she is faced with unpaid bills and creditors hounding him/her for payment.
An application is made to court for the granting of an Administration Order in his/her favour.
NOTICE TO CREDITORS
Once an application for an Administration Order is made the creditors are informed immediately by registered post. Thereafter all correspondence from creditors will be directed to the Administrator who is now in charge of the administration of the debt.
The Administrator will liaise directly with the creditors to ascertain updated balances on all accounts and negotiate with creditors on your behalf. With regard to accounts that are handed over, the Administrator will liaise with the collecting agent or representative of the creditor.
Once the Administration Order is granted in court, a copy of the order is sent by registered post to all creditors on record. The paymaster is informed immediately to stop all garnishee orders against the client’s salary and implement the Administration Order.
DOCUMENTS THAT ARE REQUIRED FOR AN ADMIN ORDER APPLICATION
The following documents are required on application:
- Identity document of applicant and spouse in case of joint application
- Latest payslip
- Copy of bank statement
- Statement of accounts from all creditors
I HAVE BEEN UNDER ADMINISTRATION FOR THE LAST 5 YEARS BUT MY BALANCE IS STILL THE SAME
The reason why your balance is still the same is because:
- Interest continues to be charged on the balance outstanding on each account.
- The administrator only makes payments every three months, yet the creditors are charging interest on a daily basis and debiting your account with this interest monthly – so you are paying more interest than if you paid each creditor yourself monthly
- Very often the amount that the creditor receives quarterly is much less than the original instalment x 3, which again impacts negatively on the total interest you, will pay in the end.
- So the debt you had in the first place can go up, not down – depending on how much you pay each month
MY ADMINSTRATORS ARE NOT PAYING MY CREDIT PROVIDERS & I AM NOT RECEIEVING STATEMENTS
You need to contact your administrator and
- Ask the administrator for copies of all the distribution accounts on you file (an administrator must by law draw up this account every three months, to show what monies he received from you and exactly what he deducted for himself and any other costs). It must also reflect what amount was paid over to each of your creditors
- Phone your creditors and check if they have received all the monies reflected on the distribution account
- Check if the administrator has been overcharging
- Ask the administrator for details of what he charged you for – this will include
- all work done before and including when the order was granted
- what interest he has earned on all the instalments that you have paid him
- how much interest he has paid over to creditors from his trust account
MY ADMINSTRATORS ARE REFUSING TO CANCEL MY ADMISTRATION ORDER
As consumer you have the right to cancel your administration order
- First you need to compile an affidavit in which you have to convince the magistrate that you have good reasons to set aside the administration order and still maintain the payments to the creditors which you had put under administration.
- The most popular and acceptable reason would be to show that your financial circumstances have improved since you applied for administration. Or maybe prove that the administration is not making life easier for you and you can do better to maintain your debts.
- The next step after the affidavit will be to serve it to the clerk of the court, the administrator and all creditors under the order.
- The clerk of the court where the administration order was obtained will be able to help you with setting or application for court dates.
- On the scheduled court date you will present your case and if there is any creditor who wishes to oppose the rescission then you will argue the case in front of the magistrate.
- If no complications are met and your affidavit is convincing; the magistrate will issue you with a rescission court order
- You will submit this court order to the credit bureaus for the removal of the administration notice from your credit record.
- The administration order will be removed from your credit record within 20 days.
- As consumer you need to make arrangements with your creditors to pay their debts.
- If all debt are settled a Section 74U Certificate will be issued by the Administrator.
- By rescinding the Administration Order you will save legal fees and interest charged by creditors.
WHERE DO I GO TO LODGE A COMPLAINT AGAINST AN ADMINISTRATOR?
Consumer that are seeking assistance regarding administration order are referred to Law Society
Law Society of South Africa
304 Brooks Street, Menlo Park, Pretoria
P O Box 36626, Menlo Park 0102
Docex 82, Pretoria
Tel: +27 (0)12 366 8800
Fax: +27 (0)12 362 0969
LSSA Legal Education and Development
Old Main Building, Unisa Sunnyside Campus, 145 Steve Biko (formerly Mears) Street, Sunnyside, Pretoria
P O Box 27167, Sunnyside 0132
Docex 227, Pretoria
Tel: +27 (0)12 441 4600
Fax: +27 (0)12 341 1339