What is a County Court Judgment?

ccj debt

WHAT is a county court judgment and how will it affect me?

Very simply, a County Court Judgment (CCJ) is a court order issued when someone doesn't keep up payments on a debt, and fails to come to an agreement with their creditor.

They set out how much you owe and how you should repay that money.

They're only made by courts in England, Wales and Northern Ireland; the Scottish equivalent is "enforcing a debt by diligence".

They're generally used to recover non-priority debts - like credit and store cards, unsecured loans, and money owed to catalogues.

They may be issued by a court, but almost everything involved in dealing with a CCJ is done by post.

When are they issued?

CCJs don't get issued out of the blue.

You'll receive a warning letter in the form of a "default notice" or "letter before action", depending on the type of debt you're dealing with, telling you that unless you repay what you owe within a certain time the company will begin court proceedings.

Credit card providers and other companies regulated by the Consumer Credit Act must send you a default notice at least 14 days before they can take any action.

The letter should tell you how you can settle your debt, and within what time frame, and what action the company will take against you if you don't do this.

It should also include a copy of the Financial Conduct Authority's default information sheet.

This is your chance to head off court action and a mark on your file that will last for years - so seek advice as soon as you receive the letter.

Don't ignore the letter. If you do, the claimant can request a "default judgment", meaning you get no chance to explain your circumstances, and the CCJ may require immediate and full repayment.

Next steps

Should you be unable to pay, or come to a final agreement with your creditor, they will apply to the county court for the judgment. The court then decides if there is a case.

You'll be sent a couple of forms: a claim form detailing how much you owe, and an "admission form". This looks a bit like a budget form, and it gives you the chance to detail your circumstances, including other debts - and make an offer of payment.

If this section is left blank, the court may decide you're unwilling to pay - even if you've admitted you do owe the money - and use that to call for immediate and full payment of when it issues the CCJ.

It's been issued - now what?

The CCJ is basically the new repayment schedule. It sets out how much you have to repay each month, and for how long.

If you seriously and genuinely disagree with the CCJ, you can apply for it to be set aside, for a fee of £155.

You need a strong reason - for example a mistake in the process that meant you received a default judgment when you'd filled in the admission forms requesting more time to pay.

Note this doesn't stop you getting a CCJ; it simply restarts the whole process.

If it's more the case you don't think you can afford what the court has decided you should be paying, get back to them within 14 days requesting a "redetermination".

Failing to meet the terms

Should you be unable to make payments, your creditor can return to court to ask for the order to be enforced.

Home buyer beware

As of 2012, creditors have been allowed to apply to have your debt secured against any property you own, using something known as a charging order - even if you've been meeting the payment schedule set out in your CCJ.

What's more, creditors can apply for charging orders at the same time as they apply for the CCJ, meaning your property is at risk from the very start.

If the court is satisfied that you own, or part-own ("have an interest in") a property, it can issue an interim charging order, which means you can be stopped from selling up before your hearing.

Our guide to charging orders is here.

Other methods

Your creditor can also apply to have the money taken directly from your wages, or freeze money in any bank accounts you have in order to service the debt.

Alternatively, the court may issue a Warrant of Execution, giving county court bailiffs the power to visit your home to collect the money, or goods to that value.

Or it can transfer the issue to the High Court, resulting in their bailiffs - High Court Enforcement Officers - being granted the right to collect what you owe.

If your creditor applies for any of these options, the fees involved will be added to the total you owe.

After you've been given the CCJ

Almost all CCJs are added to a public database, the Register of Judgments, Orders and Fines, within a month.

They'll also be visible on your credit reference files for six years.

But you can get a CCJ removed from the Register - if you pay off the debt in full within a month of the day of the judgment, or if you have the judgment set aside.

Otherwise it's there for the foreseeable future. Companies offering to remove them are treading on seriously dubious ground.

What you can do, though, once you've paid off your debt, is to ensure it's marked as "satisfied". That way anyone checking your files will see you've had a CCJ, but that you've fully paid off what you owe.

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