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Is a default a CCJ? What You Need To Know 2022

is-default-ccj

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Asking the question ‘is a default a CCJ?’ means you may have or are at risk of, defaulting on a debt you owe. They are similar but the default isn’t a CCJ. However, it’s important to know that defaulting on an account could lead to a CCJ.

Here’s what you need to know about defaulting on accounts and CCJs. I’ll explain the difference between a default and a CJJ. I’ll also share the steps if you have a default notice or receive a CCJ claim form. Finally, I’ll also tell you what is worse a default or CCJ.

Don’t worry, here’s what to do!

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It’s always best to find out about all your options from a professional before you take action.

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What is a Default Notice? Is a Default the Same as a CCJ?

You may receive a notice of default when you miss a payment or don’t make the full payment of the repayment instalment. The reason for this notice is that you have broken the terms of the credit agreement. If the default is applied to your account, it’s recorded on your credit history. This can harm your credit score. Additionally, a default notice will stay on your credit file for six years.

What Should You Do When You Receive a Notice of Default?

Your creditor will write to you and give you a warning that you’re at risk of defaulting on your account. You’ll be told a time frame by that you’re required to catch up with the missed payments. The creditors need to give you a minimum of 2 weeks to respond, but it could be up to 30 days. Check the details in the letter to see how long you have.

If you can catch up and pay the missed payments and any additional charges within the set period, the notice of default won’t be applied. This is the best outcome and I recommend trying to catch up with payments, if possible. Speak to a debt advisor if you are struggling.

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What Happens When You Get a Default Notice?

If you cannot catch up with the missed payments, you’ll be asked to clear the outstanding debt in full. You have the right to offer to pay the debt in instalments, however, the creditor doesn’t have to agree to the instalment plan.

It is worth gathering all your financial information in a monthly budget tracker, such as the one I have freely available for download. Use this tracker to help you work out how much you can afford to pay to your creditor. You can even use it to show how you came to the amount you propose to support you in your bid to repay the amount in affordable instalments.

If an instalment plan is refused, or you fail to respond to the default warning, the creditor can:

Pass the debt over to debt collectors

Take court action to recover the debt with a CCJ

Take court action to recover the debt to reclaim goods if the debt relates to a hire purchase (such as a car).

What is a CCJ?

A creditor can take you to court to register a CCJ against you if you fail to pay back the money you owe them. This is a court order and is to be taken seriously. A CCJ can be a result of a default notice if it’s applied to your account, and you fail to pay what you owe in full. A CCJ is serious, and you should respond when you receive a CCJ claim form.

A CCJ stays on your credit file for 6 years. However, you can apply to have the CCJ removed if you pay the full amount owed within 30 days. Otherwise, it will remain on your credit history until the 6 years end.

What is Worse a Default or CCJ?

You may think that a default notice is the same as a CCJ as both remain on your credit file for 6 years. However, there are big differences between default and CCJs. A CCJ is far more serious than a default. A creditor must take you to court for a CCJ and the court will decide how and when you must repay the debt. Failing to pay the debt as ordered can lead to further legal action and enforcement of the debt is possible with the use of bailiffs.

You will have to deal with a default notice in the same way as a CCJ. You must contact the creditors, or reach out to a debt advisor, to assist you with contact if you find it difficult to do so. Debt advisors will help you with working out your budget and provide information regarding debt solutions that could help you with your current situation.

What to Do with a CCJ Claim?

You’ll receive a CCJ claim form if you fail to respond to the default notice, or if you cannot agree on a way to repay the debt through instalments. Don’t ignore the claim form as it won’t stop the CCJ from happening. Ignoring a CCJ form simply means your circumstances won’t be considered by the judge.

Responding to the CCJ form gives you the chance to explain your situation and show your financial circumstances with figures. Using a budget that shows income and outgoing to show the court how much you can comfortably afford to repay increases the chances of your instalment offer being accepted. Failing to provide such information could result in the court demanding full payment, immediately.

Defaulting on a CCJ

You default on a CCJ If you fail to keep up with the agreed repayments as set out by the court. If this happens your creditor can

Instruct bailiffs to recover goods from your property. Bailiffs have the legal right to collect items from your home and sell them to raise the money you owe the creditor.

Apply to have the money taken directly from your wages with an attachment of earnings  

Use a Charging Order to take the money from the sale of your shares or property

Apply to have you made bankrupt if you owe more than £5,000. Remember to contact a debt advisor if you’re struggling to manage your debts. Additionally, I have lots of information below that you might find useful when facing a default notice or CCJ.

Are you struggling with debt?

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Stop interest and charges from soaring

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