If you owe money and don’t respond to payment requests or make an arrangement with your creditor, you may receive a County Court Judgment (CCJ).
A CCJ can have an impact on your credit score, potentially impacting your ability to get credit in the future. However, there are steps you can take to manage the situation, including exploring various debt solutions.
In this guide, we explain everything you need to know about CCJs debt, including what a CCJ is, when and why you might get one, and how to respond if you’re faced with this situation.
What is a County Court Judgment (CCJ)?
A County Court Judgment, often referred to as a CCJ, is part of the legal process used to resolve certain types of unpaid debts. If you receive a CCJ, you’re essentially being instructed by the court to pay your debt.
To better understand how this process works, let’s look at what a CCJ is in more detail.
Definition and overview
A CCJ is a type of court order used in England and Wales when a creditor takes legal action to recover a debt.
It legally confirms that you are liable for the debt and must pay it. It outlines the precise amount to be paid and any payment terms, such as whether you need to pay the debt in full or in instalments. It also sets a deadline for payment.
A CCJ is a serious legal document and failing to comply with its terms or respond to it properly can lead to further legal action being taken against you.
When and why a CCJ is issued
If you’ve fallen behind on debt payments and haven’t reached an agreement with your creditor, they may apply to the court for a CCJ to recover the money owed. Typically, a creditor will have taken formal steps to recover the debt, such as sending payment reminders, before applying for a CCJ.
Before proceeding with a CCJ, the creditor must send a ‘letter of claim’. This is a formal notice informing the debtor of their outstanding payment and specifying a deadline for repayment or response. This letter also warns the debtor that court proceedings will take place if they do not respond.
If you receive a letter of claim, it’s important you respond within 30 days. Getting debt advice around CCJs early can help you to understand your options and prepare a response. If you can agree to a repayment plan at this stage, it may be possible to avoid a CCJ altogether.
How Does a CCJ Affect You?
A CCJ is a serious legal matter that can lead to lasting financial and legal consequences if not dealt with properly. Getting CCJ debt help early can make a significant difference in how the situation is managed and help limit the impact.
Understanding the implications of CCJ is crucial. Below are some of the main ways that a CCJ can affect you:
Impact on credit score and financial options
Having a CCJ can significantly reduce your credit score. If you apply for credit when you have a CCJ, lenders will be able to see this, making it more difficult for you to access credit, such as a personal loan, mortgage or credit cards. If you are offered credit, you will be faced with higher interest rates.
If you pay your debt in full within one month of the CCJ being issued, you can apply for the judgment to be removed from the Register of Judgments, Orders and Fines and your credit report. If you pay after one month, you can get the record marked as ‘satisfied’ in the register and your credit file. However, it will remain on both for six years and can still negatively affect your credit score during this time.
Consequences for employment or renting
A CCJ can harm your job prospects. Many employers, particularly in sectors like finance and law, carry out pre-employment credit checks on candidates as part of their recruitment processes. Assessing a candidate’s financial background in this way is seen as a measure to reduce the risk of fraud, based on the idea that financial difficulties might increase the likelihood of dishonest behaviour.
In addition, you may find it harder to rent a property as some landlords and letting agents will be unwilling to rent to anyone with a poor credit history. While having a CCJ doesn’t automatically prevent you from renting, you will need to find a landlord who is willing to consider your circumstances or accept a guarantor.
How to Check if You Have a CCJ
If you’re not sure whether you have a CCJ against you, you can check the Register of Judgments, Orders and Fines for a small fee. This register is operated by the Registry Trust on behalf of the Ministry of Justice and is open to the public.
How to search the public register
You can search the public register in two ways:
- For an immediate response, use TrustOnline. You can pay the fee (starting at £6) using a credit or debit card.
- You can request a postal search of the statutory England and Wales Register exclusively by downloading and completing the search request form. The charge for this service is £10 and can be paid via cheque or postal order.
Steps to verify the details
If you find a CCJ against you on the public register, you can verify the details by contacting the court that issued the judgment. You will be able to find the case and court number on the register, as well as the sum of money owed. You can request further details by getting in touch with the court.
How to Respond to a CCJ
It’s vital that you take action promptly if you receive a CCJ. If you’re unsure about the best course of action, you should seek CCJ advice from a debt advisor before you respond.
Below we cover the different ways you may decide to respond, depending on your own personal circumstances.
Paying the amount owed
If you accept liability for the debt and have the means to pay by the deadline specified in the County Court Judgment (CCJ), you should arrange payment without delay.
Setting up a repayment plan
If you cannot afford to pay the full amount owed at once, you could offer a monthly repayment plan that won’t put you in further financial difficulty. This should be based on your monthly income, household spending and any other debts you have.
Challenging a CCJ: grounds and process
If you don’t think you owe the debt or you think the amount you owe is wrong, you should dispute the claim within 14 days of receiving the notice. You can do this by:
- Filling in the ‘defence form’, explaining why you do not owe all or part of the debt
or
- Filling in the ‘acknowledgement of service’ form and stating that you wish to defend the claim. If you do this within 14 days, you will get another 14 days to complete and return the defence form.
Can You Remove a CCJ From Your Record?
Yes, in certain circumstances, you can get your CCJ removed from the register.
A CCJ older than six years will be removed from the Register of Judgments, Orders and Fines, regardless of whether it has been paid or not.
You should also be able to get a CCJ removed if you pay the debt within one month of the CCJ being issued.
In addition, you may be able to get the entry removed if you can prove that you do not owe the debt.
Satisfying a CCJ and its implications
As stated previously, if you pay a CCJ within one month of issue, the entry will be removed from the public register and your credit file. If this happens, you should find it easier to get credit again.
If you pay the debt after one month, the CCJ will remain on the register and your credit record for six years, but it will be marked as ‘satisfied’. It will still harm your credit rating but not as significantly as it would if left unpaid.
Applying for a set-aside
To get a CCJ cancelled or overturned, you can apply for the judgment to be set aside. This involves filling in the application notice (N244) and sending it to the court. You will have to attend a court hearing to explain why you’re not liable for the debt and you may have to pay a court fee of £313.
How MoneyPlus Advice Can Help
If you receive a CCJ, it’s crucial not to ignore it, as doing so can seriously affect your financial standing and may result in additional legal consequences. Our experienced team is here to support you through the process of responding to a CCJ and to clearly explain the debt solutions available for managing and repaying the debt.
Services offered for dealing with CCJs
At MoneyPlus Advice, we offer a range of tailored services to help you deal with CCJs. Our support includes:
- Individual Voluntary Arrangements (IVAS) – This is a legally binding agreement to repay your debts over time at a rate that is affordable to you. IVAs can result in a portion of your debt being written off.
- Debt Management Plans (DMPs) – This is an informal agreement between you and your creditors to repay debts at a pace that is more manageable for you based on what you can afford.
- Bankruptcy Help and Support – We can guide you through the process of declaring bankruptcy, when it might be an appropriate option, including help understanding the consequences and alternatives.
For more information and guidance on the CCJ solutions available to you, contact our knowledgeable team at MoneyPlus. You can also access free, impartial debt advice from MoneyHelper.