You might often hear about County Court judgment or CCJ in the United Kingdom. A creditor can appeal for a CCJ if he did not get back the debt money from the debtor. It might be possible that the debtor intentionally avoids it or he can’t afford the money to repay.
All unsecured debts to which you haven’t or couldn’t pay the contractual money can lead to a CCJ. Or, individuals or a firm to whom you owe money can also take court action against you.
What is a CCJ?
If you’re a UK resident then you may have heard the term CCJ. The County Court Judgement or CCJ refers to the judgment given by the United Kingdom enforcement court. When the creditor is not getting the debt amount that you have borrowed, then they can appeal to the court. The court will review the appeal and ask you to pay the money back. The court decision can be of two types:
- A forthwith judgment which means you need to pay the full amount as soon as possible.
- You can make the payments on a monthly basis to repay the amount to the creditor.
But if you do not pay the amount despite getting the court notice, the court will hand over the case to the enforcement authority to take control of your properties.
Process of Receiving a CCJ?
The claimant (in this case the creditor who is taking court action against you), will have to apply to the court asking for a claim form to be issued. But before he can do that, he has to issue a default notice in your name.
When you receive a CCJ then you will get a claim form that describes the details of the debt amount. The claim form will be stamped by the court. A response pack will also be included containing these forms:
Defence Form: If you do not agree with the claim amount then you need to fill it up.
Admission Form: By filling up the Admission form you agree to owe the claimed amount.
Acknowledgement of Service: You need to fill this form up if you need more than 14 days to complete or defend the claim. You will get 28 days rather than 14.
You must follow the court instructions and sign the forms and send them back within 14 days. If you fill the Acknowledge of Service form, that gives you 28 days. But you must follow the court summons. Otherwise, the court may issue the order against you, even if you do not owe the money.
When you agree with the court order and confess that you borrowed the money, the court may ask for your income and expenditure details. The court will review them and issue an order asking you to pay an amount that you can afford. You need to pay that amount until the CCJ is removed.
To Whom Will You Pay the CCJ
Once a CCJ is issued, you are bound to make the payments to the creditor. But the question is, who do you pay the money to? You can directly pay the amount set by the court to the creditor who filed a complaint against you. Or, you need to pay the debt collection authorities if the debt has been passed to them.
You will get the information from the creditors as to whom you need to make the payments. There can also be a solicitor on behalf of the creditor to whom you need to make the payments.
What Happens If I Don’t Pay a CCJ?
Now, you may often think that “what happens if I don’t pay a CCJ”. Once the court issued CCJ you must make the payments to the creditors failing which may lead to enforcement actions. But it can be possible that you can’t afford to pay the amount set by the court. In such cases, you can fill up the N245 (Application to Vary an Order) form. You can get this form from any county court or even online.
But make sure you fill the form within 14 days of receiving the CCJ and send it immediately to the court.
If you can’t make any sort of payments, you can fill out the N244 ( application notice) form. It can set aside the judgment. You must also send your income and the expenditure details along with a fee to the court. Then you will get a hearing date from the court. You must attend the hearing on the given date so that you can tell your critical and financial situation to the court.
There are some instances when you can apply to the court for setting aside a CCJ.
- You got the CCJ and the claim form to your older address.
- There might be a postal issue for which you didn’t receive the form.
- You gave an answer to that claim but the creditor applied for an early verdict.
- You have given the full debt amount before the judgment.
- The claim form may include incorrect information on the debt amount that you didn’t borrow.
But if you intentionally avoid the payments then the court may handover the case to the Bailiffs for looking into it. Once the enforcement authority looks into the matter and submits the report, the court will review it. Once the court issues the warrant of control, the Bailiffs may seize your property after giving notice to you.
Does a CCJ Affect Your home?
If you have your own or a mortgaged property and you agree with the CCJ form then your home will be safe. You do not have to worry if you already agreed to make the payments. But if you somehow are unable to pay the amount then the court may issue a charging order against you.
With this process, an unsecured debt turns into a secured debt. Now if you are not able to make the payments the court may order for selling your property. In that case, the enforcement authority will arrange an auction to sell your properties to pay back the creditors.
Effect of CCJ on The Debtor
When you receive a CCJ, the first question that strikes you is about the effect of CCJ on you. If you use one or more than one credit card then CCJ may affect your credit score. Once you get the CCJ it will show for 6 years on your credit profile and may affect the credit score.
Hence, you can not borrow money from other creditors as the lenders may see the CCJ on your profile. So, it will be very difficult for you to get more credit and become debt-free.
The CCJ will be added to the Register of Judgements database. The court sends those CCJs to a registry trust that operates these files and databases.
What to Do If You Haven’t Borrowed Any Money from the Creditor?
If you receive a false claim stating that you owe money from a creditor then don’t panic. Never agree to such claims that are false. You just need to keep calm and then follow the rules provided below.
- First, you need to fill the Defence form that you do not agree with that claimed amount.
- You have only 14 days to complete the forms. So, you can just send the “Acknowledge of Service” form by filling it up. Then you will get an additional 14 days to send the Defence form.
- Next, you will get a hearing date from your local court and you must be present on that date. You can clear the matter on that day with effective evidence.