How to cancel an Administration Order
What is an Administration Order?
Administration is an option you may have taken in the past if your debts at the time were less than R50 000 and you were not able to pay off or service these debts. An administrator would have been appointed to collect from you an affordable amount of money at regular intervals. Such amounts would be distributed to your various creditors that are encompassed in the administration order.
An administration order is granted in terms of section 74Q (1) of the Magistrates’ Court Act 32 of 1944. The process of administration orders was initiated as a means of debt relief for people who are overwhelmed by debt and whose estate is so small in that the costs of sequestration proceedings will swallow it. This is done in order to assist a debtor during financial difficulties without going through the route of sequestration. See Fortuin v Various Creditors 2004 (2) SA 570 (C), African Bank Ltd v Jacobs 2006 (3) SA 364 (C), Bafana Finance Mabopane v Makwakwa and Another 2006 (4) SA 581 (SCA).
- When can an administration order be cancelled?
- What is the process and cost to cancel an administration order?
- FAQ’s – Cancellation of Administration Orders
An administration order can be cancelled if “good cause” can be demonstrated to the court. Examples of good cause include:
(a) change in financial circumstances, for instance, you earn more today or have less debt;
(b) the creditors are not being paid timeously. For instance, the administrator is making payments to the creditors on a trimonthly basis whereas the debtor can make payments directly to the creditors on a monthly basis
(c) the administrator is not duly performing their duties as an administrator or the administrator’s charges are in dispute
In addition to the “good cause” requirement, an administration order can also be rescinded when all the debts that were under administration have been paid.
Firstly, we must assess if the consumer’s financial circumstances have changed for the better since he or she went under administration. Once we are certain that the administration order can be rescinded, we will provide a detailed quote, without obligation. We require a nominal deposit to open a file and start work on an instruction. Once we have received the deposit, we will collect all required outstanding documentation and prepare a court application. We then apply for a court date and once the rescission order is granted, we remove the administration notice from the consumer’s credit reports. The consumer can then begin to pay his or her creditors directly.
Once we have established that the consumer has a case and that the administration order can be rescinded or set aside, we provide a detailed quote for a set fee, which can be paid off over 6 months. Consumers may make use of our direct debit facilities or pay the monthly instalment directly into our bank account.
The following are frequently asked questions about the cancellation of Administration Orders;
Q: If I have not paid up my administration order and your rescind it, what happens to the creditors that I still owe?
A: The rescission and cancellation of an administration order does not mean that you no longer need to pay the debts that were placed under the administration order. Once it is rescinded, you are still legally obliged to pay the creditors you still owe but as opposed to paying the outstanding creditors via an administrator, you can pay the creditors directly by way of payment arrangements. We assist with setting up such payment arrangements once the administration order has been rescinded.
Q: My credit report reflects that I am under administration but I have not been making any payments to my administrator. Can you still help me?
A: Yes. We can still assist you
Q: I have paid up all the debt that was under the administration order and my administrator has given me a section 74U certificate but the administration order still reflects on my credit report. What can I do to remove the administration order from my credit reports?
A: A section 74U certificate is issued by the administrator once the costs of the administration and the listed creditors have been paid in full. However, the credit bureaux do not remove an administration order simply on the basis of the section 74U certificate as a rescission order must still be obtained. Once the administration order is rescinded, a rescission order is obtained from the court and we forward the rescission order to the credit bureaux and ensure that the administration order listing is removed from your credit reports.
Q: How long does an administration order stay on my credit report in the event that it is not rescinded?
A: In terms of the National Credit Act 34 of 2005, an administration order reflects on one’s credit report for a mandatory period of 10 years.
Q: My administrator told me that I can only cancel my administrator order once all the debt encompassed in the administration order has been paid in full. Is this true?
A: No. An administration order can be cancelled even where there are still outstanding amounts owing to the creditors encompassed in the court order.