County Court Judgements – CCJ

A County Court Judgment (CCJ) is a legal order in the UK, indicating that an individual owes money and has failed to repay. It adversely affects credit ratings and impacts your ability to secure credit.

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If you have outstanding debt, your creditor (the individual or business you owe) may take you to court and issue a County Court Judgment (CCJ) against you.

The court will then decide whether there is a debt to pay and, if they think you owe the money, they will serve you with a judgment outlining how and when payment should be made.

But how does a CCJ affect your credit rating? And, what will happen if you ignore a CCJ? Receiving a CCJ can raise more questions than answers, but the more you know about CCJs and how they work, the more you can prepare.

What is a CCJ?

A CCJ is a type of court order that can be registered against you if you enter into a credit agreement with an individual or business and fall behind on your repayments.

Most creditors will try to come to an agreement with you before taking court action and you should always be given an opportunity to arrange payment before being issued with a CCJ.

Once a CCJ has been entered, the court will either issue a judgment forthwith (where the total debt is due immediately) or a judgment in instalments (where the total debt is split into monthly payments). This will usually depend on your financial situation and the information provided to the court.

When you receive a CCJ, it's important to respond promptly and seek further advice if necessary.

Not cooperating with the court or ignoring a CCJ can lead to your creditor taking further legal action against you, such as sending bailiffs to your home or deducting money from your wages.

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How will a CCJ affect my credit rating?

"The amount of points your credit rating will drop by depends on various factors but a CCJ will usually see you lose around 250 points."

If you've been served with a CCJ, you may be wondering how it will affect your credit rating and for how long.

From the date the judgment was entered, your CCJ will be visible on your credit file from each of the main credit reference agencies for six years.

During those six years, your credit score will be significantly lowered and you'll be viewed as a high-risk lender which can make it difficult to get approved for any other credit agreements, such as a phone contract, bank account, personal loan, or mortgage.

This is because a CCJ indicates that you've struggled with debt in the past and there is a chance you could default on future repayments.

The amount of points your credit rating will drop by depends on various factors but a CCJ will usually see you lose around 250 points.

This is in addition to the points lost due to the missed payments or defaults that led to the CCJ. 

Where else will my CCJ be visible?

As well as being added to your credit file, your CCJ will also be added to a public register known as the Register of Judgments, Orders, and Fines or the 'CCJ Register' for six years.

This is an online list of all individuals who have had a CCJ issued against them.

The register is publicly available - meaning anyone can search for your or their name on it if they wish - but it is usually only accessed by banks, landlords, lenders, and employers when they want to check your recent credit history or confirm the financial information you have provided is correct.

Some of the details that will be added to the register include your name and address, your total debt level, and the status of your case.

The register won't hold any details on your creditor, but this information can be found by contacting the court that issued your CCJ and quoting your case number.

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Is a CCJ a criminal offence?

CCJs may be issued by the court, but having a CCJ in your name doesn't mean you have a criminal offence and you can't be sent to prison for not paying or sticking to the terms of your judgment. This also means that a CCJ won't appear in any criminal record searches carried out by an employer or landlord.

However, it's important to note that ignoring a CCJ could lead to your creditor taking further action against you and, in extreme cases, this could involve applying to make you bankrupt.

What does the typical CCJ process look like?

The CCJ process can differ slightly but usually follows the same set of steps. Here is a guide to what you can expect when your creditor applies for a CCJ:

Letter of claim

Before your creditor can apply for a CCJ, they must prove they have tried to come to an agreement with you over how to repay the debt.

This is known as the 'pre-action protocol for debt claims' and will usually involve your creditor sending you a 'letter of claim' or 'letter before action' to encourage you to make payment.

The letter must clearly outline the amount owed (including interest), details of the original credit agreement, and how and when payment should be made.

There will also be a reply form and financial statement enclosed, both of which must be completed and returned to the court within 30 days.

Default notice

The next step in the CCJ process is receiving a default notice. This is essentially a warning letter informing you that because you have officially broken the terms of your credit agreement, your account has defaulted and you have 14 days to make payment or agree on a payment plan before further action is taken.

The default notice must clearly explain how the credit agreement was broken (e.g. missed payments) and what your next steps should be if you want to avoid court action.

Claim form

Failure to make payment or agree on a payment plan will result in you being issued with a claim form or 'county court claim form', which is essentially a document confirming that your creditor has issued a CCJ against you.

The claim form will come with an income and expenditure form enclosed, which you must complete and return to the court within 14 days, clearly outlining your financial situation and how much you can realistically afford to repay towards your debt each month.

Unfortunately, there is little you can do to stop a CCJ from going ahead after a claim form has been issued and not making an offer of payment may mean that the court sets your repayments at a rate you can't afford or asks you to pay the full amount upfront.

Judgment

The final step in the CCJ process is being served with a CCJ. The judgment, which will arrive in the post, will outline the total amount owed, how payment should be made (in instalments or upfront), and the deadline for making payment.

The only way to stop a CCJ from going ahead at this point is to repay the full amount owed within a month of the judgment being issued.

This will get the CCJ removed from your credit file and the public register - as if it was never issued in the first place.

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How can I avoid a CCJ?

The best way to avoid a CCJ is to make repayments in full and on time and keep your creditor informed of any unexpected changes to your financial situation (e.g. if you lose your job, your income is reduced, or you have an emergency expense).

Even if you know there's no way you're going to be able to repay your debt, your creditor will be more willing to come to an agreement with you if you're open and honest about why you can't pay.

For example, they may allow you to temporarily reduce your payments, pause your payments, or spread your payments over a longer period.

Remember, a CCJ should never come as a surprise and you should always be given multiple opportunities to repay your debt before your creditor takes you to court.

Whether you repay the debt in full or agree to repay it in regular instalments, early communication can help you avoid a CCJ.

There are also various debt solutions that can help you deal with your debt and avoid a CCJ, such as an Individual Voluntary Arrangement (IVA). With an IVA, you can repay your debt through a series of monthly payments based on what you can comfortably afford and any remaining debt will be written off at the end of your arrangement.

What happens if I ignore a CCJ?

"Once a CCJ has been issued, the statute of limitations no longer applies and there is no time limit on how long your creditor can chase you for the debt."

Whether you don't believe you owe the debt or can't afford to pay it, you may be tempted to ignore a CCJ in the hope that it eventually goes away.

However, if your creditor has gone to the effort of applying for a CCJ - which requires a court fee - they're unlikely to give up chasing you for the debt until they've recovered the full amount.

The first thing your creditor is likely to do when you ignore a CCJ is send bailiffs to your home to seize your belongings.

They may also deduct money from your wages (Attachment of Earnings Order) or freeze your bank account or building society (Third Party Debt Order), but these actions are rare and are usually only considered as a last resort.

Some people also believe that if they ignore a CCJ for six years, it will become unenforceable by law or 'statute barred', but this isn't necessarily true.

Once a CCJ has been issued, the statute of limitations no longer applies and there is no time limit on how long your creditor can chase you for the debt.

Can CCJs be removed before six years?

When you're issued with a CCJ, it will be added to your credit report and the public register for six years, making it difficult to access further credit.

However, there are some instances in which you may be able to get it removed before the six years are up:

Pay the full amount within a month

The quickest way to get a CCJ removed is to pay the full amount within a month of the judgment date.

When you do this, you'll need to inform the court in writing and provide proof of payment. The CCJ should then be removed from your credit report and the public register within a few weeks, leaving your credit score unaffected.

This is recommended if you can afford to pay off your debt in full or the CCJ is only for a small debt, such as a parking fine, as it can prevent your credit score from being damaged for six years.

Apply to get the judgment set aside

Sometimes, a CCJ is issued in error or without following proper procedure. When this happens, you can argue that you weren't given a fair chance to respond or defend the claim and ask the court to cancel or 'set aside' the CCJ.

This will get the CCJ removed from your credit history and the public register but you'll need a genuine reason for getting it removed and will be asked to provide evidence to support your claim.

The court will usually agree to set aside the CCJ if the creditor should have known you had moved but didn't attempt to find your new address, if you can prove you gave your creditor your new address before the claim was issued, or if the claim was made without following the correct rules.

Wait for it to be automatically removed

The only other way to get a CCJ removed is to wait six years for it to be automatically removed. This will happen after six years regardless of whether it's been paid in full, partially, or not at all, and can be the best option if the CCJ is almost six years old and you can't afford to pay it.

However, this isn't recommended if the CCJ was issued recently or if you're in a position to pay it in full or in instalments as it will damage your credit score for six years and your creditor can still take legal action against you.

Can I make changes to my CCJ once it's been issued?

There are two main ways of asking the court to make changes to your CCJ once it's been issued - with a 'variation' and with a 'redetermination':

Applying for a variation

If you think your CCJ repayments have been set too high, you can ask the court to lower them to an amount you can comfortably afford.

When you contact the court, you must provide details of your income, expenditure, and debt, which the court will review before making a decision.

This is known as a 'variation' and can be applied for when a situation arises that is likely to directly affect your income, such as a sudden job loss or drop in income.

There is also a court fee of £14 required to apply for a variation, so you must only do so if you're confident you can't pay.

However, you can only apply for a variation in certain circumstances, such as if you didn't reply to the original claim form or defended the claim but lost.

Furthermore, the court will only agree to vary your payments if doing so would be fair on both you and your creditor and there is no way you can afford your current monthly payments.

Applying for a redetermination

If you know you won't be able to afford your CCJ repayments, you must ask the court to review the terms handed down to you and include a copy of your budget summary showing what you can pay within 14 days of the judgment date.

This is known as a 'redetermination' and is free to apply for as long as the court receives the paperwork no more than 16 days after the judgment date and the CCJ was a 'judgment after determination', meaning you returned your paperwork on time, the creditor refused your offer of payment, and the court decided how much you should pay.

The court will then review your application and may invite you to a hearing to give you an opportunity to discuss your financial circumstances with a judge.

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Conclusion

County Court Judgments (CCJs) can be a quick and easy way for creditors to collect debts they have been unable to recover.

If you've been issued with a CCJ, it essentially means the court believes there is a debt to pay and you must repay the money owed upfront or in instalments.

Being told that your creditor has issued a CCJ against you can you can be daunting, but as long as you respond promptly and cooperate with the court, you should have no problems.

Failure to stick to the terms of your CCJ or ignoring letters from the court will put you at risk of further legal action.

Once you've received a CCJ, you may be able to make changes by applying for a variation (to lower your monthly payments) or redetermination (to change your terms).

Key Takeaways

  • A County Court Judgment (CCJ) is a type of court order that your creditor can serve you with if you fail to make repayments on a debt
  • From the date you receive the judgment, your CCJ will remain visible on your credit record and a public register for six years
  • Having a CCJ will lower your credit score and make it difficult to access most forms of credit, such as a mortgage, personal loan, phone contract, and even a bank account
  • When you ignore a CCJ, your creditor may send bailiffs to your home or deduct money from your wages to recover the money they are owed
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