You may be familiar with the term CCJ, but do you know what it actually means and how they can affect you?
In this short guide, we’re going to look at when you could be issued with a CCJ, what it means for your legal rights and what to do if you receive one.
CCJ stands for County Court Judgment and is a court order available to a judgement creditor in England, Wales and Northern Ireland that will be registered against you if you fail to pay back money you owe.
In Scotland, the process is called enforcing debt by diligence.
There are many different reasons why people receive a CCJ. Sometimes it’s because of unpaid parking tickets, sometimes it’s because of unpaid utility bills you didn’t know were outstanding or credit card bills you have defaulted on. Everyone’s situation is different.
If you have failed to establish an agreement with people you owe money to (your creditors), you could be issued with a County Court Claim by the Court on the application by a creditor.
Your creditors must send you a warning letter informing you that you need to repay what you owe; otherwise legal action will begin.
You can expect the warning to be either a default notice or a letter before action, depending on your type of debt.
For credit agreements regulated under the Consumer Credit Act, you must be sent a default notice at least 14 days before any action is taken.
The notice should contain details of how you can remedy the fault and what action may be taken if you fail to do so.
It must also include a copy of the Financial Conduct Authority’s default information sheet.
If you receive notice of a potential or actual CCJ you should seek advice immediately to ensure you deal with the claim correctly; the court can take your circumstances into account when making a decision on how you should repay the debt owed.
It’s extremely important to remember that ignoring a CCJ warning will not make it go away. If you ignore the letter, the court will still issue the judgement, however, they won’t be able to take your circumstances into account when making their decision.
For instance, they could order you to pay back the sum owed in full when it is impossible for you to do so.
The simple answer is yes. You have 14 days to respond after you’ve received a Claim Form.
You are required to fill in the reply, which includes an Income and Expenditure form − detailing all your income and outgoings. This will show the Court how much money you have available to pay off the debt.
After the court, has passed judgement they can issue:
- A judgement by instalments, where you pay your debt off over time, or
- A judgement forthwith, where the whole amount you owe is due immediately
If you accept the claim and make an offer of a monthly payment, the likelihood is you’ll receive a judgement allowing you to pay off the debt by instalments.
The monthly rate of payment will be set by the court, taking into account the information you provided in your admission form.
If you fail to provide the necessary details, the Court is unable to take your circumstances into account and will still enter a judgement against you.
This judgement is known as a default judgement and could be a judgement of instalments or a judgement forthwith.
In both cases, you ask the Court to look into it again if the repayments are more than you are able to reasonably afford. This is known as a redetermination.
The CCJ process has different rules depending on whether you have met certain timescales throughout the process.
If you receive a CCJ and fail to keep to the terms, your creditor can ask the court to enforce their debt. There are several ways in which they can do this:
Nobody wants to see a bailiff come knocking at their door, however it’s a real possibility if you ignore a CCJ. The creditor can apply to the county court for a bailiff to collect the debt and if the court agrees and grants permission, it will issue a Warrant of Execution.
Once granted, the bailiff has the power to visit your home or business to collect the outstanding money you owe, or seize goods that can be sold to help repay your debt.
You can ask the court to suspend the Warrant to allow you to pay back the money at an affordable rate. Get advice from a trained debt adviser to do this.
Attachment of Earnings
An Attachment of Earnings Order asks for the money owed to be deducted by your employer directly out of your wages.
If it is going to cause you problems financially, contact us to discuss your circumstances.
Yes it will, unless you pay it off in full within 30 days of receiving the judgement.
It will appear on your credit record at the register of Judgements, Orders and Fines and will remain there for six years.
Your chances of obtaining a mortgage, credit card, bank account or even employment could be seriously affected in the future.
If a CCJ has already been issued, the debt associated with it can still be included within an Individual Voluntary Arrangement (IVA). This is because an IVA is legally binding. Once your IVA has been agreed by your creditors, it then supersedes and overturns the Judgment.
You are then no longer required to keep to the payment terms you agreed, as the debt is paid within the IVA in the same way as any other debts that have been included.
If you have been paying towards the CCJ you can cancel this payment once your IVA has been approved.
After your IVA has been approved:
- The IVA will be shown in the Public Record section of your credit record. It may take a few weeks to appear, but when it does the date will be the date that your IVA started.
- Any debts that are included in your IVA which have not been marked as defaulted, should have the date your IVA began added.
- Any debts already marked as defaulted or for CCJs will remain the same.
- Debts such as your mortgage will remain the same, as they do not form part of your IVA.
If you’re finding difficulty keeping up with your payments, speak to a debt adviser as soon as possible. They can help you to negotiate with your creditors and explain all the options available to you.
Creditors are much more reasonable when you make the effort to come to an arrangement with them, and usually will allow you to make ongoing payments you can afford to them, in order to avoid court action.