How to Deal With a CCJ

A CCJ is a County Court Judgment. You get a CCJ if a lender takes you to court because you have not repaid a debt and the court agrees that you owe the money.

If a CCJ is awarded against you, you will be notified of the CCJ via post and once you have a CCJ that CCJ will remain on your credit history for six years if you do not settle the CCJ within one month.

Avoiding a CCJ

There are two ways that you can avoid a CCJ. The first is to attend court and tell the court why you do not believe that you owe the money. If the court agrees, the CCJ will not be granted.

Simply not being able to repay the money because you cannot afford to do that won’t be sufficient. If you want to avoid the CCJ you will need to be able to show that either you have already repaid the money or that you didn’t owe the money in the first place.

If you didn’t attend court because you didn’t receive the original claim from the court you can apply to have the CCJ set aside. This is similar to attending court to defend yourself before the CCJ has been granted, although if you apply to have a CCJ that has already been granted set aside you will have to pay a fee.

If you agree that you owe money but disagree with the amount being claimed, you can also ask the court to agree to the lower amount. The court does not have to agree to the reduced amount and you would need to show that the lender was claiming an incorrect amount from you. Simply saying that you cannot afford the full amount will not work.

Settling the CCJ

If you agree that you owe the money, you cannot avoid the CCJ or have it set aside. You will either need to pay the amount that you owe in full or come to an arrangement to repay it in instalments.

If you are paying via instalments, the amount that you will need to pay will be based on how much you can afford, even if that is only a tiny amount of money each month. That tiny amount could be as little as £1 per month if that is all that you can afford to pay.

If your situation changes so you can no longer afford to pay the agreed instalment amount, you can apply to the court to have the instalment amount reduced. You may have to pay a fee although this fee may be waived if you are on a low income. The court may disagree with the revised amount that you are proposing and decide that another amount is more appropriate.

The details of person that you need to pay will be on the CCJ notification. You should not pay the court. It is essential that you can prove that you’ve paid regardless of whether you paid the full amount or are paying via instalments. Make sure that you get a receipt or some other proof that you have made each payment that you make.

What Happens if You Don’t Settle the CCJ

You cannot get sent to prison if you do not settle a CCJ. However, there could be other ramifications.

If you do not pay the debt in full or do not pay the instalments that were set, a bailiff may visit you to recover the outstanding amount or to seize your property so they can sell it to cover the debt. If this happens, the bailiff’s charges will be added to the amount that you owe.

Bailiffs have fairly limited powers in this situation and can only enter your home if you invite them in. If you don’t let them in they can take property that is outside your home, such as your car or garden furniture. It is also likely that they will return to try to recover the money at a later date and so the fees will start to mount up.

Another option is that the court might grant an Attachment of Earnings Order. If one of these is granted the instalments are taken automatically from your wages each month. As well as meaning that you cannot avoid settling the CCJ it would also mean that your employer would know that you had a CCJ. This could have an impact on your job directly if your contract of employment mentions financial solvency because you are in a high-profile position or a finance-related role, or it could have an indirect impact, for example by meaning that you were passed over promotion.

Finally, the court could grant a Charging Order if you own your home. This would mean that if you don’t repay the debt you would run the risk of losing your home.

Your Credit History

If you settle the full amount within one month of the judgment you can apply to have the CCJ removed from the public register and your credit file. There is a small fee to do this which can be waived if you are on a low income.

If you do not settle the full amount within one month of the judgment the CCJ will stay on the public register and your credit file for six years. This will make it difficult for you to get credit in future. It could also make it difficult for you to get a mobile phone contract, or get your energy suppliers to agree to letting you pay for your gas and electricity via monthly direct debit rather than via a pre-payment meter.

However, if you settle the full amount within those six years you can apply to the court for a Certificate of Satisfaction. This does not remove the CCJ from the public register, but it does show anyone checking the register that you have settled the debt. This can go some way to improving your credit score.

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