If you’re struggling to make repayments towards a debt, your creditor (the individual or company you owe money to) may issue a County Court Judgment (CCJ) against you.
Usually, you will be warned your creditor is taking legal action against you and given a chance to make up for missed payments before receiving a CCJ. But this isn’t always the case, and some people don’t find out they have a CCJ until they check their credit score or are rejected for credit.
What is a County Court Judgment?
A County Court Judgment (CCJ) is a type of court order a creditor may register against you for repeatedly failing to make repayments towards a debt in England, Wales, and Northern Ireland.
Typically, a CCJ is issued after your creditor has been unsuccessful at recovering the money owed and has gone to the court in a last-ditch attempt to get you to pay.
Before you are served with a CCJ, you should receive several letters warning you of upcoming legal action. These documents will provide details of the debt and give you a final chance to repay what you owe before the court gets involved.
How does a CCJ affect my credit rating?
If you have missed or late payments, they will be noted on your credit record for six years and your credit rating will naturally decrease as a result.
If your creditor issues a CCJ over these payments, it will also be added to your credit record for six years. During this time, your credit rating will decrease further and you may find it difficult to qualify for other credit agreements, such as a loan, bank account, or even a phone contract.
Furthermore, if a lender notices a CCJ on your credit file, they may be less likely to let you borrow money as this indicates you have failed to stick to the terms of a former credit agreement and may struggle with another arrangement – especially if interest rates rise.
As well as your credit record, your CCJ will also be added to the official statutory Register of Judgments, Orders, and Fines for six years. This is a public database containing details of all court orders passed down by UK courts in the last six years.
How can I check if I have a CCJ?
There are two simple checks you can carry out to find out if you have a CCJ:
Check the public register
If a CCJ was issued against you in the last six years, details of the judgment will be visible on the Register of Judgments, Orders, and Fines (previously the Register of County Court Judgments).
To access the register, visit the Registry Trust website at https://www.trustonline.org.uk/ and enter your name and address. There is a small fee of between £6 and £10 per search.
The register will let you know if you have a CCJ and how much you owe, but only the relevant court can provide claimant information and tell you who issued the CCJ.
Check your credit report
If you have a CCJ, it will be visible on your statutory credit report from any of the main credit reference agencies (Experian, Equifax, and TransUnion) for six years.
Usually, a credit reference agency will allow you to access a copy of your credit report for free, but there may be a small fee involved.
Checking your credit report regularly will give you a complete overview of any debts, balances, and court orders that might have been issued against you in the last six years.
Can I have a CCJ without knowing?
When your creditor applies to the court for a CCJ, you will receive a letter of claim in the post. This will give you an opportunity to repay the debt or come to an agreement on how to repay the debt within 30 days.
If you don’t respond or come to an agreement in 30 days, you will receive a default notice warning you that legal action will commence unless you pay the outstanding balance within 14 days.
All creditors should follow this procedure when issuing CCJs, but mistakes can happen. For example, your creditor may have sent documents to an old address or not given you enough time to respond.
The only time a creditor is allowed to serve notice to your last known address is if they have gone to great lengths to find your current address without any success.
Can I remove a CCJ?
Once a CCJ is issued, it will be added to your credit file and a public register for six years.
However, there are certain instances in which you might be able to get it removed earlier.
If you owe the debt
Pay the full amount within 30 days
The quickest way to get a CCJ removed from your credit file is to pay the full amount within 30 days and send proof of payment to the court.
This will remove the CCJ from your credit file and the public register as if it never existed and your credit history should remain largely unaffected.
Wait for it to become statute barred
If you agree to owing the debt but don’t have the funds to pay it off during the first 30 days, the CCJ will remain on your credit file for six years.
After this period, it will be automatically removed from your credit file and the public register and your credit score will gradually recover – as long as you stick to the terms of any other credit agreements.
If you don’t owe the debt
Apply for it to be set aside
If you don’t agree to owing the debt, you may be able to get it cancelled or ‘set aside’.
This can be done by downloading and completing an ‘application notice’ (form N244) from the GOV.UK website and returning it to the court that issued the CCJ. There may be a small fee required.
The court will then review the evidence and decide whether to set aside or proceed with the CCJ. If the court is satisfied with the evidence provided, the CCJ will usually be removed from your credit file and the public register within four weeks.
What can happen if I ignore a CCJ?
Once you have been issued with a CCJ, you must make an effort to stick to the terms of your arrangement as closely as possible.
If you don’t agree to owing the debt or don’t have the funds to repay it, it can be tempting to ignore it and hope it disappears. However, this will only make the situation worse and put you at risk of further legal action.
Here is a quick guide to what can happen when you ignore a CCJ:
Bailiffs can visit your home
The first thing a creditor is likely to do when you ignore a CCJ is instruct bailiffs to collect the debt on their behalf.
They can visit your home to demand payment for the debt or, if you can’t pay, seize possessions to sell at auction to recover the money owed.
This can have a serious impact on your mental and physical health and may lead to you owing more in legal fees in the long run.
Money can be taken from your wages
When you ignore a CCJ, your creditor may apply to the court to take the money directly from your wages with an Attachment of Earnings Order.
The court will work out how much should be taken from your wages and instruct your employer to deduct a certain amount each time you get paid (weekly or monthly). The money will be sent directly to the court before being passed on to your creditor.
This process will continue for as long as necessary until your total balance has been repaid. During this time, you will have less disposable income and you may struggle to afford basic expenses.
Your bank account can be frozen
When you ignore a CCJ, your creditor will be free to apply for a Third Party Debt Order to freeze your bank account.
They will then be able to recover the debt directly from whoever is holding the money (usually a bank account or building society) before it reaches you.
Third Party Debt Orders are rare but are often used to create an element of surprise as, by the time you find out about it, your bank account will already be been frozen.
You can be made bankrupt
Another way your creditor can respond to an unpaid CCJ is by trying to make you bankrupt.
The bankruptcy process will follow the same steps as if you were to make the application, but your creditor will be responsible for the fees instead of you.
This is only an option if you owe over £5,000 and have repeatedly failed to make payments or come to an agreement over how to pay the debt.
Conclusion
A CCJ can have a serious impact on your credit history and affect your ability to access most forms of credit for several years.
This is why it’s important to check for CCJs on a regular basis and, if you discover you have one, take action to deal with the situation as soon as possible.
Whether you admit to owing the money or don’t think you should pay, there are certain processes you must follow to ensure the problem is dealt with effectively.
