What is a CCJ?

Unfamiliar with CCJ’s? After today, you will understand why you should NEVER get one.

A CCJ is a shortened term for County Court Judgement, which is a type of court order used in England, Wales and Northern Ireland. This is known as a decree in Scotland.

When you owe money to someone, whether it’s rent or paying off a personal loan, a creditor can go through a process to get their money back. They will do this by applying to have a CCJ issued against you by the court.

The court will make the final decision whether to issue a CCJ to you. If they decide there is no debt to pay, the case will be dropped. However, if they agree to what the creditor says you owe them, the CCJ will determine how the debt should be paid back.

You will be sent two documents from the court: a claim form and an admission form.

As the name suggests, a claim form is a letter sent by the court which details how much debt you owe the creditor.

You have two weeks to send back the admission form, which you must fill out. If you don’t, the court has a right to force you to pay the amount in full, even if you don’t have it. You should still send the form back if you’re only a few days late.

There could be a slight chance that the creditor hasn’t contacted the court on the date of the deadline, so they might include your form when they do eventually contact them.

However this is highly unlikely, so it’s crucial you send back your admission form before the deadline.

How long does a CCJ last?

When a CCJ is issued, it will show up on your credit file and will stay there for six years max.

If you manage to pay it off within a month, the judgement will be removed completely. You will need to do this by applying to the Registry of Judgements, Orders and Fines.

If you pay the judgement off at a later date, it will be marked as ‘satisfied’. You will need to contact the court to make sure the CCJ has been resolved, as the creditor may not do this.

However, if you fail to pay off the CCJ, it will stay on your record for six years before automatically being removed. Not only does it show up on your credit file, it will seriously hurt your credit rating.

Studies show from previous borrowers who were issued a CCJ, lost around 250 points from their credit rating. This will also affect your ability to apply for credit in the future.

A lender will look at your credit file when deciding if they should lend to you. Seeing a CCJ may sway them away from you, as it shows them you have struggled to keep up with repayments with a previous lender.

Although it won’t affect your current mortgage, it will lower your chances of applying for a new one. This can cause serious problems if your mortgage deal is too costly or coming to an end.

It may also affect your ability to move out of your rented home, as the CCJ will show up on a credit check.

How do you remove a CCJ?

The best way to remove a CCJ is paying it off in full during the first month, this includes any interest and possible court fees. Paying the amount in full means you don’t have to send the admission form back, plus you won’t have to worry about going to a court hearing.

If you can’t pay back the full cost, you can ask permission to pay it back later or make instalments with your creditor. If you go with this option, a CCJ will be issued by the court and you will definitely need to send the form back.

You can argue against the case if you feel your creditor is wrong about the amount owed. You will need to fill out the forms and explain the reasons why you believe you shouldn’t pay for the amount which the creditor is asking for. You will however, need to pay for the amount you think is appropriate.

If you strongly disagree with the judgement made against you or you feel the creditor is asking for more than the required amount, you can make a claim against them. You must fill out the admission form and explain as much as you can why you believe the creditor is asking for more money, as your form will be used as evidence.

If the court decide the amount requested by the creditor is correct, then a CCJ will be issued against you. This means you must pay back the full amount or in monthly instalments.

What happens if you don’t pay a CCJ?

It’s important you don’t ignore a CCJ, otherwise your creditor can go to court and apply for enforce its judgement. This will result in more costs and can go as far as having the bailiffs knocking on your front door.

If you are really struggling to pay off the CCJ, you can ask permission to have the amount you owe lowered or delay them.