Despite careful planning of your finances, it is always possible that an unexpected expense could leave you struggling until payday. For those who do not have access to savings or traditional forms of credit, such as overdrafts and credit cards, this can lead to a financial emergency. This is especially true for those with a […]
What Are CCJ’s? County Court Judgments Explained
A County Court Judgment, or CCJ as they are commonly known as, is a type of court order in England, Wales and Northern Ireland. A CCJ can be registered against an individual which fails to repay a creditor. If a CCJ is not paid promptly it can impact your ability to obtain credit for up to six years, putting many loans, credit cards and mortgages out of your reach.
If you already have a CCJ, or have received a notification of court action, this guide will explain everything you need to know about County Court Judgments.
What is a CCJ?
CCJ’s relate to outstanding monetary sums, which are recorded on the statutory Register of Judgments, Orders and Fines. This is a detailed record which is used by credit reference agencies, as part of the assessment of an individual’s creditworthiness.
If a creditor believes you will not repay money owed and various warning letters have been ignored, they may apply to the court for a CCJ against you. Before a creditor can apply for a CCJ, they must send a default notice at least 14 days before they file the claim.
What to Do If You Receive A CCJ Claim Form
The court will issue a claim pack, which you have 14 days to respond to. If you have received forms in the post which appear to be sent from the court, this will mean that a creditor has applied for a County Court Judgment (CCJ). The pack will include an N1 claim form, an N9 response pack, an N9A admission form and the N9B form for defences and counterclaims.
The forms will feature the name of the court in the top right-hand corner, the creditors name, the claim number and the reference or account number which relates to your account with the creditor.
The N9A form includes a variety of important sections, especially those which relate to your income and expenditure. This is designed to assess your ability to repay the debt in full or over a longer period of time.
It is important to respond to any forms straight away, as this will ensure any potential court claims take into account your situation. The court will allow a few days for the forms to arrive at your address, so check the exact deadline which is printed on the forms. If the form is ignored, the court is likely to issue the CCJ without considering your financial circumstances.
If you disagree with the amount owed, you can file a defence. This can take longer that the 14-day response time, so you can submit an acknowledgement of the claim and explain that you need longer to prepare your defence of the claim.
When is A CCJ Issued?
If the courts believe that you are unlikely to repay the creditor, they will issue a CCJ. If you have already admitted to the claim and offered to make monthly payments, it is likely that the judgment will ask for monthly instalments. The details you provided within the claim form will be used by the court to decide how much you can afford to repay each month.
If you failed to respond to the claim form, a judgement in default will be made by the court. This simply means that the court is able to decide whether the debt should be repaid in a single instalment or over a longer period of time.
It is important not to ignore a CCJ, as further action can be taken. The CCJ letter or notice will provide details of how you can respond and the repercussions of ignoring the CCJ claim. If the repayment requirements are affordable, you can ask for a re determination, which asks the court to reconsider your situation. If you receive a CCJ, we always advise that you should seek advice straight away.
Can I Dispute A CCJ?
If you feel that the court has wrongly issued a CCJ and you have a valid reason, you can ask for the CCJ to be set aside. For example, if the court sent the CCJ claim forms to the wrong address, or you can prove that the debt was already paid. The court will charge a fee and you will need to attend a court hearing, where you will be able to explain why the CCJ should be set aside.
What Happens If You Do Not Pay A CCJ?
If you do not keep to the terms set out in the CCJ, the creditor can request that the court enforces the debt. This can be achieved through bailiff action, an Attachment of Earnings Order or a Charging Order. However, keeping to the terms of the order and repaying the correct amounts at the right time, will limit any potential further action.
The court can ask a bailiff to collect the outstanding debt and they may also grant a Warrant of Execution. This will provide the bailiff with the power to seize goods from your home or business, with the aim of selling these to repay the debt. It may be possible to ask the court to suspend the Warrant of Execution, by asking for more time and lower debt repayments.
Attachment of Earnings Order
The court could set in place an Attachment of Earnings Order. This will mean that repayments are automatically deducted by your employer from your wages.
If you own a property outright or have a mortgage on a property, the creditor can request that the court issues a charging order which is secured against the property. If you fail to repay the debt, this could mean that you lose your property.
The Impact of A CCJ on Your Credit File
When a CCJ is issued you will have 30 days to repay the debt in full. If you do not pay, the CCJ will be listed on the Register of Judgments, Orders and Fines and will remain on your credit record for 6 years. This will have a serious impact on your ability to obtain credit in the future, even bank accounts and mobile phone contracts could be unattainable.
If you are able to pay the CCJ within 30 days, you can complete an application to have the CCJ removed from the register, which will protect your credit rating. You will need to provide proof to the court that the debt was paid within the 30-day period. The court can then issue a certificate, which you will need to pay for. In some circumstances this fee can be waived or reduced, but you will need to prove that you are on a low income.
Once you receive this certificate, you can ask for the court to update the Register of CCJ’s. This change will be reflected on the various credit reference agencies and the CCJ will be removed from your file. However, once the 30-day payment option passes, the CCJ cannot be removed from your credit report and will stay on the file for 6 years.
If you are unable to pay the CCJ in a single payment, making regular payments to the court may reduce the negative impact on your credit rating. When you pay the CCJ, the debt will be marked as satisfied, however the CCJ record will still remain on your credit file for the six year total.
What is the Register of Judgments, Orders and Fines?
The Register of Judgments, Orders and Fines is commonly referred to as the CCJ Register. It is a public register, so anyone can view the records for a small fee. The records show the name, address, the court and case number and the amount of money owed for each individual with a CCJ. The register does not include the details of the claimant, this information is only available to the individual who was issued with the CCJ.
The register is accessed via the Registry Trust Limited Website, which is designed to make it easy to access your own records and also for those who many need to view others records. For example, landlords may want to check the register to see if a potential tenant has a history of non-payment.
The register can also be used by businesses which are looking to check the financial details of a potential customer, before supplying a credit account. In some cases, potential employers may even check the register, especially if the position holds financial responsibility.
Can a CCJ Be Removed From My Credit File?
You can request that the credit reference agencies remove the CCJ record from your credit report in some circumstances. The first is if you were able to pay the CCJ within 30 days of the issue date and can prove that the Register of Judgments, Orders and Fines reflects this.
Alternatively, if you successfully disputed the CCJ and the courts cancelled the claim, it can be removed from your file. Finally, if six years has passed since you received the judgment, you can request that it is removed. However, the credit reference agencies should automatically remove the record after six years passes.
Can I Get a CCJ If I Am on a Debt Management Plan?
Yes, the courts can still issue a CCJ if you are on a dept management plan (DMP). However, a DMP show your creditors that you are willing to take steps to repay your debts. By making regular and affordable payments to your outstanding debts, usually creditors will be less likely to apply to the court for a CCJ.
How Can I Rebuild My Credit Rating After Receiving A CCJ?
The first step to rebuilding your credit rating after a CCJ appears on your credit file is paying the debt. Once the debt is fully paid, it will be marked as satisfied on your report, which is much better than having an outstanding CCJ listed. Although, you may still find it difficult to access mainstream forms of credit.
As the CCJ ages, your credit rating is likely to gradually improve, although this will depend on your ability to keep up with other credit commitments. If you are looking to improve your credit score following a CCJ, the following steps should help:
1) Registering on the electoral roll
2) Make all credit repayments on time
3) If you think you may default on a payment, always try to reach an agreement with the creditor.
4) Check your credit report regularly and ask for any potential errors to be recorded.
If you were unaware that you had received a CCJ, but have noticed the record on your credit file, the court which made the judgment will be able to provide the various details needed for you to arrange payment.
How to Avoid a County Court Judgement
If you find that you are unable to keep up with credit repayments, instead of ignoring the problem always try to talk to a free and impartial debt advisor. They will be able to offer advice about negotiating more flexible terms with your creditors and they will also explain the various options available.
In most cases, your creditor will agree to an arrangement which will help you avoid potential court action. If the creditor does instruct the court, if you respond to the initial court form within 14 days, it may be possible to reach an agreement without a CCJ being issued. If you are behind with repayments, it is important to keep on top of your mail. If letters remain unopened, you could end up with a CCJ which could have been avoided.
Can I Get Help About How to Deal With A CCJ?
If you have received a CCJ and are unsure what to do, there are various debt advice charities which can offer free expert advice, such as StepChange and The Money Advice Service. These impartial organisations can recommend the steps you need to take to manage your debt as well as clear advice about the Court claim process for CCJ’s.