What is a County Court Judgment (CCJ)?

A county court judgment is a court order issued against a borrower who cannot repay their debts. Your lender may apply for a CCJ against you if it believes you won’t pay off what you have borrowed because you haven’t kept up with repayments.

If a court agrees with your lender, it will send you a judgment ordering you to pay the money back. Information about your CCJ will be sent by post and you can choose to take one of the following actions:

• Pay the full amount right away.
• Request an extension or pay in instalments.
• Ask for the terms of the claim to be changed (if you believe the amount you owe is inaccurate).
• Apply for the CCJ to be cancelled if you don’t owe the money.

It’s important to act quickly as soon as you receive a CCJ. Ignoring a judgment or failing to meet the terms could result in more serious action being taken against you, such as repossession of your belongings.

The above guidelines apply to England and Wales.

In Scotland, the process where creditors take steps to get their debt repaid through court action is called ‘enforcing a debt by diligence’. Creditors will take out a court order, called a decree, against you for the repayment of the debt. Similar to CCJs, these are recorded on your credit history and The Registry Trust for six years.

In Northern Ireland, county court judgments are used but the process starts in a different way from England and Wales. Creditors will send a civil bill first, which details the amount you owe, plus any court fees and the reason for the debt. If you can agree to repay the creditor at this stage, then you can avoid a CCJ.

For more details on money judgment guidelines for Scotland and Northern Ireland, debt charities, such as National Debtline and StepChange, can provide further information.

What to do when you receive a CCJ claim form letter

A creditor must send you a ‘letter of claim’ in the post before they can proceed with a CCJ. The claim letter sets out the details of your debt, such as how much you have to repay.

A reply form will be included with your claim letter, which must be returned to the creditor within 30 days. The creditor can begin court action if you don’t reply to the letter in time.

You can use the reply letter to take one of the following actions:

• Agree with the creditor (and negotiate your repayments if you aren’t able to pay the lump sum straight away).
• Let the creditor know that you are getting debt help.
• Ask for more information about the debt.

If you can agree on a repayment plan with your creditor from your reply letter, court action will be avoided.

Can you negotiate a CCJ?

It is possible to negotiate a CCJ but you must act quickly. When you receive a CCJ, you also receive a form to reply to your creditor. On the reply form, you can either agree with the debt specified or dispute it if you think it’s incorrect.

Your reply form must be completed and returned to the lender within 30 days of the date the letter was sent. Sticking to this deadline is important, as the court won’t consider your circumstances if it is late.

If the court finds that you still need to pay the CCJ, you can negotiate how soon it must be paid and whether you can repay in instalments rather than a lump sum.

What happens if you ignore a CCJ?

Ignoring a CCJ or failing to meet its terms may result in more serious court action being taken against you including:

• Losing the right to appeal: Failing to act may mean you won’t be able to challenge your lender if you think the CCJ is incorrect.
• Wage loss: If you’re an employee, the money you owe may be taken directly from your wages, known as an attachment of earnings.
• High Court Enforcement Officer visit: Representatives may be sent to your home to collect the debt and look for goods in your home to recover the debt.
• Bailiffs: You may get bailiffs visiting your home to ask for goods or money to pay off your CCJ debt.

It’s worth noting that bailiffs and enforcement officers can’t force their way into your home. But even a doorstep visit will be a stressful experience, so If you are struggling financially and not in a position to repay your CCJ it’s important to act quickly and request an extension or delay in the payment date.

Who can see a CCJ?

All CCJs are recorded on the Registry of Judgments, Orders and Fines, which is a public archive that anyone can access for a fee.

CCJs are also recorded on your credit report and may be viewed by lenders, your employer, or companies such as estate agents that may run a hard credit search on you.

How long does a CCJ stay on your credit file?

A CCJ typically stays on your credit file for six years. However, you may be able to get it removed from your credit history earlier if you pay the full amount straight away. CCJs are also recorded on a public register for six years and may be accessed by anyone who pays a fee to view the archive.

» MORE: How long does a CCJ stay on your credit file?

Can you remove a CCJ from your credit file?

You can ask a credit reference agency to remove a CCJ from your file if you can prove one of the following:

• The CCJ was paid off in full within one calendar month of it being issued.
• Six years have passed since you received the CCJ.
• The CCJ was cancelled or ‘set aside’ by the courts.
• An insurance company was responsible for the debt.

Does a CCJ affect your credit history?

Having a CCJ on your credit file can negatively affect your credit score and can make it more difficult to borrow money in the future. That’s because a CCJ indicates that you have had trouble managing debt in the past, which suggests there is a greater chance that you may not be able to keep up with repayments.

How to improve your credit history after a CCJ

Although a CCJ can make it more difficult to borrow, it isn’t the end of the world. And there are lots of ways to improve your credit score and get your finances back on track, including taking the following steps:

• Making repayments on time: Timely repayments indicate to lenders that you are a reliable borrower and can pay off your debts on time.
• Using credit wisely: Keeping your credit usage low shows lenders that you don’t rely too heavily on it and can manage your finances well. As a rough guide, try to keep the percentage of your available credit below 30%.
• Registering to vote: Getting on the electoral roll helps lenders verify your identity and address easily, which can help to boost your credit score.

It may take a few months or even years for your credit score to improve, but the key thing to focus on is getting your finances on track and sticking to good financial habits. Eventually, your score will bounce back and boost your chances of being accepted for credit in the future.

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