If you have unpaid debt, the individual or company you owe can serve you with a County Court Judgment (CCJ) to force you to make up for missed payments.
When you receive a CCJ, it’s important you know how to respond and how it can impact your finances on a wider scale – especially your credit rating. Having a CCJ can stop you from getting a loan, mortgage, car loan, or bank account, and this can be even more of a problem if you don’t know who issued the court order in the first place.
What is a CCJ?
In England, Wales, and Northern Ireland, a CCJ is a type of court order that can be issued if an individual or company is owed money and hasn’t received payment.
Usually, a CCJ is issued as a last resort if your creditor has attempted to recover the money owed but you haven’t responded to requests for payment or attempted to set up a repayment plan.
Receiving a CCJ means the court has formally decided you owe the money and must repay the debt in full or in instalments.
Why have I received a CCJ?
Typically, a CCJ is issued after you have missed two or three payments but, unlike other court orders, there is no minimum debt level required. This means you can receive a CCJ for anything from a small parking fine to months of unpaid utility bills.
Before you are legally served with a CCJ, your creditor should give you several opportunities to make up for the missed payments by repaying what you owe in full or setting up a repayment plan. Because of this, a CCJ should never come as a surprise.
Even if you didn’t receive a CCJ claim form, you should have received letters about the unpaid debt and what was likely to happen if you didn’t repay what you owed within a certain period.
However, while rare, it is possible to receive a CCJ without knowing and you may only find out you have a CCJ when you check your credit record or are rejected for credit.
How does the CCJ process work?
There is no set process for issuing a CCJ but most courts follow a certain procedure when serving debtors with CCJs. Here is a quick guide to the steps typically involved in the CCJ process:
Pre-action protocol
Before your creditor can take legal action against you, they must carry out a series of steps to prove they have tried to resolve the problem without going to court.
This is known as the ‘pre-action protocol’ and outlines the actions both you and your creditor are expected to take before entering into legal action over an unpaid debt.
The main aim of the pre-action protocol is to encourage you and your creditor to agree on how to deal with the debt without the need for court action.
However, in situations where court action is unavoidable, it also outlines the behaviour both parties should follow to minimise court costs and potential delays.
Letter of claim
When your creditor applies for a CCJ, you will receive a letter of claim in the post outlining how much you owe and when and where payment should be made.
The letter of claim will come with a reply form enclosed which must be completed and returned to the court within 30 days.
The reply form should clearly state whether you agree to owing all, some, or none of the money or if you require more information about the debt before you can make a decision.
Default notice
The next step in the CCJ process is being issued with a default notice warning you that legal action will happen if no contact or payment is made in 14 days. For credit agreements made under the Consumer Credit Act (1974), a minimum of 14 days’ notice is a legal requirement.
The default notice will tell you what your next steps should be as well as what will happen if you don’t respond or attempt to repay what you owe.
Claim form
Failure to respond or agree on how to repay the debt within 14 days of receiving a default notice will lead to you being issued with a claim form. This is a letter informing you that your creditor is taking legal action against you to recover money owed.
The claim form will come with a reply form enclosed which you must complete and return to the court within 14 days, providing details of your current financial situation.
If you ignore the claim form, the CCJ will still go ahead but the court won’t take your income and expenditure into account when calculating your payments. This could lead to your payments being set at a rate you can’t afford and, in some cases, you may be asked to repay the full amount immediately.
Judgment
Once the court has reviewed your case, it will issue a CCJ forthwith (where you pay the debt in full) or a CCJ in instalments (where you make monthly payments towards the debt).
If you’ve never denied owing the debt and made a suitable offer of payment, the court should take this account and set your repayments at a rate you can afford.
“No fuss, just simple, honest advice. Communication is good and they make the process as easy as they can.”
How will a CCJ affect my credit rating?
When you have a CCJ, it will be listed on your credit file for a total of six years. During this time, your credit rating will be lowered and you may find it difficult to access certain credit products, such as a loan, mortgage, phone contract, or even a bank account.
Having a CCJ on your credit file can also lead to lenders viewing you as high-risk as it proves you have struggled with debt in the past. This will make them less likely to enter into a credit agreement with you and you may find that any credit applications you make are rejected or come with higher interest rates.
However, there are steps you can take to gradually improve your credit score and boost your chances of obtaining credit. Once a CCJ has been removed from your credit report after six years, your credit score should also automatically improve.
Can I have a CCJ without knowing?
As previously mentioned, you should have plenty of opportunities to settle your debt or come to an agreement over how to repay what you owe before you are officially served with a CCJ.
However, there are situations in which you may have a CCJ without knowing. This usually happens if the creditor sends the claim form to an old or wrong address or doesn’t follow the correct procedure when serving you with the CCJ.
These instances can make it difficult – if not impossible – to know you have a CCJ and you may not find out until you check your credit report or apply for a loan or mortgage and your application is rejected.
How can I check if I have a CCJ?
The thought of having a CCJ that you don’t know about can be worrying. Thankfully, there are various checks you can carry out to find out if you have a CCJ:
Check your credit report
If you have a CCJ, it will be listed on your credit report from all three credit reference agencies (Experian, TransUnion, Equifax) for six years. Depending on which credit reference agency you use, this may involve a small fee.
Regularly checking your credit file can give you a complete overview of your finances and debts, including any CCJs that may have been issued without your knowledge.
Check the public register
CCJs are also listed on a public register from the Registry Trust known as the Register of Judgments, Orders, and Fines for six years. This is an online database with details of all individuals with County Court Judgments (CCJs) and High Court Judgments (HCJs).
The register will list your name, address, court reference number, judgment date, and whether the CCJ has been repaid or ‘satisfied’. There will be a small fee of between £6 and £10 per search.
How can I find out who a CCJ is from?
Checking your statutory credit report and the public register will let you know if you have a CCJ but unfortunately won’t tell you who issued the CCJ or, in other words, who you owe money to.
However, if you know you have a CCJ but just don’t know who from, you can contact the court directly and ask who issued the CCJ. They will usually ask you for some key details, such as your CCJ reference number, so they can locate your case and tell you who issued the court order.
Alternatively, you can contact the County Court Business Centre (CCBC) and ask for more information about the CCJ by emailing [email protected] or calling 0300 123 1056.
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Can I remove a CCJ from my credit file?
There are some instances in which you may be able to get a CCJ removed from your credit file, including:
Pay the full amount within 30 days
If you repay the full amount owed within 30 days, the CCJ will be removed from your credit file and the public register and you will be free to move on with your life – as if it never existed in the first place.
Once you’ve repaid the full amount, you are advised to apply to the court for a certificate of cancellation to prove you don’t owe anything else towards the debt. This can be useful when you apply for credit or in the event of a potential dispute with your creditor down the line.
Apply to get the judgment set aside
If you’ve discovered a CCJ but you don’t believe you owe the money, you can apply to get the judgment cancelled or ‘set aside’ by completing and sending an application notice (N244) to the court.
This can happen if you weren’t aware of the CCJ or weren’t given a chance to defend the claim, but you’ll need to prove to the court that you have a genuine reason for not owing the money.
There is a fee required to set aside a CCJ (currently £275) and no refunds are given for unsuccessful applications so you should only apply if you are confident you don’t owe the money.
Wait six years
Though not technically getting it removed from your credit file, it is worth remembering that a CCJ will be automatically removed after six years whether you repay it or not. This can be an option if you admit to owing the money but can’t afford to repay it, for example.
However, as well as living with a poor credit rating, your creditor can still take legal action against you at any time during these six years. This could lead to bailiffs visiting you at home and seizing goods to repay the debt.
What happens if I ignore a CCJ?
If you only recently found out you have a CCJ, you may be wondering if you should just ignore it and wait until it’s automatically removed from your credit file. This may sound like a good idea if you only have a few months left until it becomes statute barred, but it can also be a risky move.
For example, as long as you don’t make payments towards a CCJ, your creditor can instruct bailiffs or debt collection agencies to visit your home and remove belongings to sell in an attempt to repay the debt.
Alternatively, your creditor can ask your employer to make regular deductions from your wages or salary to pay the debt. When this happens, a set amount will be deducted before you get paid each month until the total debt has been repaid.
Lastly, while usually only considered as a last resort, you could be arrested and sent to jail for ignoring a CCJ as it can be classed as disobeying a court order. This can happen if you have ignored several requests for payment or the court knows you have the means to pay and are just refusing to do so.
Conclusion
Having a CCJ can wreak havoc on your finances and make it difficult to access credit for several years. However, if you were unaware of a CCJ or who issued it in the first place, this can make the problem even more difficult to resolve.
Regularly checking your credit report can help you keep on top of your finances and prevent a situation where you’re refused a mortgage or loan because of an unknown CCJ on your credit file.
If you were unaware of a CCJ because it was sent to the wrong address or you weren’t served with the right documents, you may be able to get it set aside and removed from your credit file.
