Dealing with CCJs

November 2009

According to Credit Action, two thousand consumer County Court Judgments (CCJs) were issued every day in the first 3 months of 2009.

According to Credit Action, two thousand consumer County Court Judgments (CCJs) were issued every day in the first 3 months of 2009. Just under 30% of the people that EuroDebt's debt advisors see in their homes have some form of legal action pending or in force. Dealing with CCJs is very important and EuroDebt can help before or after creditor or debt collector action is taken.

What is a CCJ?

A County Court Judgment (CCJ) is a judgment that a county court issues when someone has failed to pay money that they owe. When you owe money to someone, they can apply to the County Court for a judgment against you to reclaim the money. The Court will decide whether there really is a debt to pay. If there is, they will issue a CCJ and this will set out how the debt should be repaid. Since the beginning of 2008 the average judgment amount has been over £3,300.

What is the process to get a CCJ against me?

When someone takes county court action against you, you'll be sent a CCJ Claim Form. This court form will explain how much the creditor says you owe them. As part of this process you will be also sent an Admission Form. Don't ignore this form AND send it back within 14 days. If you're late, the CCJ may be issued anyway in a default judgment.

This form is your chance to put your side of the story or your defense before the CCJ is decided on. You also have option for the hearing to be held in your local county court. Many judgments are processed through the 'bulk processing' centre in Northampton and this is routinely used by the larger lenders and debt collection agencies.

The hearing itself is very straightforward and held in private. You don't have to attend unless you're disputing the claim - the court will then consider the evidence in your admission form. The court will set your repayments based on your statement-of-affairs (i.e. your income & expenditure). If you need help with this then contact us as soon as you receive the paperwork.

What are my options?

Your options are based upon your financial circumstances and whether the claim against you is disputed. We have considered the situations separately.

You owe the money:

1. You pay the claim amount in full (plus any interest and court fees shown) immediately. Straight away. You don't need to send the forms back. There won't be a court hearing and you won't have a CCJ recorded against you.
2. You make an offer of repayment by filling in the form stating how you propose to pay. A CCJ will be issued.

There is a dispute:

1. If you dispute the amount owed then return the forms with an explanation. You should pay what you think you owe straight away or ask for time to pay. The court will arbitrate and if they rule in favour of the creditor then a CCJ will be issued against you.
2. If you totally dispute the claim then return the 'Defence Form' to the court, setting out your side of the argument. You can ask for more time if you fill out the 'Acknowledgement of Service' form.
3. You can counter claim against the creditor, though is more common in non-regulated credit transactions. In this situation you will need to fill out the counterclaim form.

What if I don't pay?

If you fail to pay on time or miss one or more payment instalments then the creditor (the plaintiff) can return to court to enforce the order. Some or all of these legal costs will be added to what you already owe, so missing payments is not to be taken lightly unless there is a genuine reason for non-payment and in such circumstances professional advice should be sought.

Methods the court can use to enforce judgments include:

1. A 'warrant of execution' which results in a court bailiff attempting to seize your goods to sell to pay the money, if there are sufficient assets to cover the amount owed
2. An 'attachment of earnings' order that allows payment instalments to be taken directly from your wages or salary. Your employer is forced by law to deduct money from your wages and pay it to the creditor. This may prove embarrassing and this is often used as payment tactic by collectors
3. A 'charging order', where typically a charge is placed on Land Registry and what is owed is taken from the sale of your property after other charge holders (e.g. your mortgage provider) have been settled. It is extremely rare for an unsecured creditor to seek an 'order for sale after obtaining a charging order. As a result of the costs involved, charging orders shouldn't really be considered on debts below £2,500
4. A '3rd party debt order' that freezes money held in your bank accounts so it can be used to pay what is owed.
5. Transfer to the High Court. This results in a High Court Enforcement Officer collecting the money or seizing your goods to sell to pay the money.

You may also receive an 'order to obtain information'. This is an interview to discover information about your financial situation and it is part of the judgment enforcement process. Failure to attend can have serious consequences, including imprisonment.

How do I find out if I have a CCJ?

Searching the register held by Registry Trust Limited is very straightforward. Information can be found at: trustonline.org.uk/search-yourself/

EuroDebt uses the register as a routine part of its assessment of a client's statement-of-affairs. Just under 30% of EuroDebt's clients have at least one CCJ. EuroDebt handles thousands of Variation Orders every year to help clients establish a fair repayment arrangement with all their creditors, including those that have taken earlier legal action.

You can also obtain a Free Experian Credit Report and this will include any county court judgment information, an example of which would appear as:

Credit: Experian, Credit File Explained

If you believe a court judgment recorded on your credit report is wrong, contact the court (quoting the case number included on your report).

How do I pay a CCJ?

If you pay the amount of the judgment within one month, Registry Trust and the credit reference agencies remove it from their records as long as a court has issued a certificate of satisfaction. If you pay the judgment after one month, it will stay on the credit reference agency records for six years, but it will be shown as being settled if the court has issued a certificate of satisfaction. If a judgment was recorded against two people, it will say so on your credit report.

How long does a CCJ last on my credit record?

The CCJ remains on the register for six years unless you pay the claim amount within one month. The CCJ will be removed from the register if you pay in full within one month of the day of the judgment. Registry Trust will notify the credit reference agencies of the cancellation of the judgment.

If you pay the CCJ after the first month then it stays on the register but it will be recorded as 'satisfied' requiring a certificate of satisfaction . The only other way to remove a CCJ is to ask the court to set aside the judgment because you have a genuine reason to dispute it.

Scotland and the sheriff court

There is a different legal jurisdiction in Scotland and the system for Scottish Decrees (the equivalent of a CCJ) is different. The average Decree amount since the beginning of 2008 is over £900, substantially lower than in England & Wales. You can find out more at: the Scottish Courts Website

Conclusion

Kevin Still, Director of EuroDebt concludes: "Obviously avoidance is the best strategy, by acting on creditor correspondence at the earliest stage before legal action is threatened. So, if you are struggling to meet their payment demands then seek professional advice. Sometimes, despite our best efforts, a creditor or debt collection agency will seek to enforce a debt and a judgment is required as part of the process to secure their financial interest, for example with a charging order.

"Negotiation remains one of the most effective methods of dealing with threatened legal action in the early stages and presenting your circumstances and a coherent statement-of-affairs in a standard format is important. Each of your unsecured creditors will want to know that they are being dealt with on a fair basis and that you have made sacrifices in your household budget to achieve this. If a judgment is enforced then we may seek to vary it using a Variation Order based upon what you can reasonably afford."

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