The Debt Advisor (help for individuals) 0800 0851 825 and The Business Debt Advisor (help for self employed and businesses) 0800 848 8036 deal with judgement queries frequently. We thought it would be helpful to summarise below our advice for individuals and self employed who are facing judgement action.
County Court Judgments (CCJ)
If you have been issued with a County Court Judgement (CCJ), it can often be a frightening and worrying experience. Usually, a CCJ is combined with an underlying debt problem, so you should seek help and advice if you find that you are struggling to make your contractual payments.
What is a County Court Judgment CCJ?
CCJ stands for ‘County Court Judgement’. It is an order made by the court on someone who owes money to another person or company (creditor). The judgement is entered on the ‘Register of County Court Judgements’. These entries will remain on the register for 6 years from the date the judgement was obtained.
Organisations such as banks, building societies and credit companies use the information on the Register when someone applies for credit such as a loan or overdraft. It helps them decide whether or not that person would be able to pay the debt back to the company.
How does the person I owe money to obtain a CCJ against me?
Firstly, in order to obtain a judgement, you must owe the person or company money. Generally the collection process will start with creditors sending reminders to pay and if these are ignored the debt is often referred to a debt collection business. Many creditors have in-house collection departments who will chase you for payment. Generally they will give you a time limit to pay the debt and following which they will issue a default notice which will stay on your credit record for 6 years. This does effect your credit status.
If during this process you agree to a payment plan which is acceptable to the creditor, they are likely to cease further collection action as long as you stick to the agreed plan. If you do this early enough you could avoid getting a default notice.
If for whatever reason you don’t communicate with the creditor, they will step up their collection efforts. This could include referral to a specialist debt collection business who will use e-mail, phone and letters to contact you and remind you to pay.
What should I look out for when being issued with a CCJ?
A CCJ starts out with a claim form being sent to you. This form will have been stamped by the court and is usually blue in colour (but this can vary from each court).
You will also get a response pack that will include the following forms:
Defence and Counterclaim Form (N9B) – you should complete this if you disagree with the amount of the claim.
Admission Form (N9A) – if you complete this form, you are admitting to owing the full amount claimed.
Acknowledgement of Service – this form is to be used if you wish to defend the claim and require time to put together your defence.
On the ‘Claim Form’ there will be specific details about the case explaining what the creditor says you owe to them, the payment deadline and the details of which you need to pay.
There is a time limit in which you will need to reply to the ‘Claim Form’. This is 14 days from service of the form. The court also allows 5 days for postage, giving a total of 19 days from the date the ‘Claim Form’ was issued.
If you get one of these letters or notices you should try to make every effort to reach an agreement with your creditor to pay back what you owe.
At The Debt Advisor, we are able to help you negotiate with your creditors if you are in debt and are struggling to maintain your contractual payments.
Once issued with a CCJ, what are my options?
When you receive your ‘Claim Form’ you need to respond within the time period given. Whatever you do, don’t ignore the claim or miss the deadline. If you do this, the company claiming against you can request a default judgement. If the default judgement is granted, the courts will set a monthly repayment, or you may ordered to pay the money in full at once.
Pay the amount you owe within 14 days of the judgement. (plus any interest and court fees shown). If you do, you don’t need to send the forms back. There won’t be a court hearing and you will not have a CCJ recorded against you.
Ask to pay the amount later or in instalments. If you do decide to offer this, you will need to complete the N9A form saying how you would like to pay. A CCJ will still be issued.
Dispute the amount owed. If you think that you owe less than is claimed, you need to send the forms back explaining why. You should pay what you think you owe straight away or alternatively ask for time to pay. The court will decide whether you or the creditor is right. If the court decides that the creditor is right, they will issue a CCJ against you.
Dispute the claim. If you don’t think you owe anything, return the Defence Form that is sent to you within the ‘Claim Form’ pack to the court explaining why you are disputing the claim.
Claim against the creditor. If you think you are owed money instead (i.e. if an electrician sues you for non-payment, but you think he owes you money for breaching the contract) you’ll need to fill out the counterclaim form included within the ‘Claim Form’ pack.
How do I pay my CCJ?
The judgement form will explain how you should repay your debt. It’s important to make sure you have proof of your payment. So you should keep a record of your payments – and make sure that you repay what you owe within the deadline.
What happens if I can’t pay the CCJ?
If you can’t afford to make the payments ordered by the Court, there are a couple of steps you can take.
Firstly, you can obtain a form from any County Court online and make an ‘Application to Vary an Order’ (N245). This allows you to tell the court how much you can reasonably afford to pay back to your creditor every month once you have taken into count every day living expenditure (i.e. bills and food). If the creditor doesn’t agree to the amount you have stated, then the court will decide how much you’ll repay.
What happens if I don’t make the correct payments on time?
If you don’t make the correct payments on time, then the creditor can ask the court to enforce payment using one of the following methods:
A Warrant of Execution
This gives a county court bailiff the power to visit your home or business to collect the money you owe, or see whether you have any goods to the value of the money which you owe.
If you cannot pay, the bailiff will look at your belongings and decide whether you own anything that could be sold at auction to pay the debt.
If your creditor has asked for a Warren of Execution, you will usually be sent a letter saying that if you pay the amount of the warrant to the court within seven days, the bailiff will not come to your home or business. If you don’t pay, the bailiff will come to your home to collect payment or take goods to sell at auction.
A Charging Order
This is an order of the court placing a ‘charge’ on your property, such as a house or piece of land. The charge will be for the amount owed to the creditor. The charging order will not mean that the creditor obtains the money immediately, but it does safeguard the money for the future.
A charge on a property usually means that if the property is sold, the charge has to be paid first before any of the proceeds of the sale can be given to you. However, this charge DOES NOT force you to sell your property.
If you are struggling to make your contractual payments on time and would like to seek advice, please call us on 0800 0851 825 and one of our advisors will be happy to discuss the options with you.
How do I find out if I have a CCJ entered against me?
If you do not know if you have a judgement registered against you or by which court it has been registered, you can search the Register. A fee is payable.
You can do this by sending a letter to:
Registry Trust LTD
173/175 Cleveland Street
Your credit file will also show if you have a CCJ on your record. There are two main credit agencies in the UK, Experian and Equifax both of which will hold your credit information and are used by lenders.
You can obtain a copy of your credit file from either credit agency however a fee is usually involved. Details of how to obtain your credit file can be found on the relevant websites below.
How will a CCJ affect me?
If you have a CCJ registered against you, then you may find it difficult to obtain credit. However, this may not be the only reason. To find out more about how credit companies decide whether to lend money, there is a leaflet available called ‘No Credit?’ from the Office of Fair Trading (OFT) http://www.oft.gov.uk/
How does a CCJ affect my Credit Rating?
If you have been issued a CCJ or a High Court Judgement, it will stay on the Register of Judgements, Orders and Fines for 6 years.
However, if you pay the amount you owe within one month of the date the CCJ was issued to you; you can apply to have your CCJ entry on the register removed.
If you pay the amount you owe after a month, you can get the judgement record marked as satisfied on the register. This means it will still appear on the register for 6 years, however people who search the register will see that you have paid. Please note however, that having an entry as ‘satisfied’ or having it removed from the register does not guarantee that you will be given credit.
If you don’t pay the amount owed, it will appear as a negative factor on your credit report and this will therefore lower your overall credit score. This means it will be hard to obtain quality credit after the record has been made and rebuilding your credit rating in the future will be harder for you. It’s therefore important to pay the required amount should you in any way be able to afford to do this.
If you have been issued with a CCJ form or have a CCJ that you can’t afford to repay, please call us at The Debt Advisor on 0800 0851 824 or complete our quick contact form and one of our advisors will call you back. If you are self employed and struggling, our team at The Business Debt Advisor will help provide advice on your options. Please call them on 0800 848 8036.