When a CCJ is issued, it’s usually because of an underlying debt problem that PayPlan can offer free debt advice for.
Listed below are some of the frequently asked questions and answers on CCJs.
Which debts could lead to a CCJ?
All unsecured debts to which you have not paid the contractual payment or the agreed arrangement. Others who can take you to court include any individual or firm that you owe money to. Court action can still occur even if you are making token payments to the creditors.
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What is a CCJ?
A County Court Judgment is a judgment issued by the court when you have failed to make the payments stated in the contract of your credit agreement. The courts then set an affordable regular payment based on the individual’s circumstances.
Why have I received a CCJ?
CCJs are usually a result of failing to keep up with the contractual payments and should be used by the creditor if you have made little or no attempt to come to an alternative agreement. The creditor must have issued a default notice before being able to apply to the court for a CCJ to be issued.
What is the process of receiving a CCJ?
The Claimant (the creditor who is taking action against you) will have to apply to the court for a claim form to be issued; this will give all details of the debt.
You will receive a copy of the claim form, which must be stamped by the court. The claim form will detail the amount the creditor has claimed you owe. You will also get a response pack that will include the following forms:
- Defence Form – you should complete this if you disagree with the amount of the claim;
- Admission Form – if you complete this form, you are admitting to owing the full amount claimed.
- Acknowledgment of Service – this form should be completed if you require extra time to complete or defend the claim. This will give you 28 days rather than 14.
You should NEVER IGNORE court paperwork and you must ensure the relevant forms are completed and sent back within 14 days, unless you complete the Acknowledgment of Service, in which case, you will have 28 days. Should you ignore a court summons, the order could be made against you, even if you don’t owe the money!
If you agree you owe the money, the court will require your income and expenditure details. The court will then look through these details and apply guidelines to your expenditure and will set the order for the amount you can realistically afford. You are then required to make that payment until the CCJ is paid off.
What if I don’t owe any money to that creditor?
If you don’t agree that you owe money to a creditor who has applied to the court you will need to do the following:
- You will need to complete the defence form (included in the response pack from the court) with your reason for disagreeing with the claim.
- If you require longer than 14 days to complete the form send the Acknowledgment of Service form back and then you will have an additional 14 days to complete and send the defence form.
- You local court will then arrange a hearing date, which you must attend.
The situation will be discussed in court and a solution will be agreed.
Who do I make the CCJ payments to?
You make the payment (the amount set by the court) to the creditor who made the claim, or the debt collection agency it has been passed to. You may be required to make the payments to the solicitor acting on behalf of your creditor. The creditors will inform you whom you need to make the payments to.
What happens if I can’t pay the CCJ?
If you are unable to make the payments ordered by the Court you can obtain a form from any County Court or online and make an ‘Application to Vary an Order’ (N245). There may be a fee involved of £40 unless the application is made within 14 days of the recovery Judgment.
If you are unable to pay any of the CCJ you can make an ‘Application Notice’ form N244, which can have the Judgment set aside. Your new income and expenditure will have to be sent to your local court along with a fee of £80. A hearing date will be set for you to attend the court and discuss your situation. A representative of your creditor may also appear.
What happens if I don’t pay the CCJ?
Once a CCJ has been issued, you must continue with the CCJ payments. Failing to make the payments can lead to a number of enforcements being taken such as the issuing of Bailiffs, a “charge” being placed on your property (Charging Order) or the court can have money deducted straight from your wages (Attachment of Earnings Order).
What will happen to my home?
If you have a mortgaged property or own a property outright and you pay the agreed amounts to the CCJ, your property will be safe – but if you fail to make the repayments the court can issue a Charging Order. This process turns an unsecured debt (such as a credit card or store card) into a secured debt (like a mortgage) and if you then fail to maintain the repayments, the court can force the sale of the property to pay back the creditor (see House Repossession).
How do I find out if I have a CCJ?
How will a CCJ affect my credit rating?
Your CCJ will appear on your credit file for 6 years (if it takes you more than 6 years to repay the CCJ, the creditor will re-register it with the credit reference agencies). However, your credit rating will already be affected by the fact you have not paid the contractual payments, which has resulted in you receiving a CCJ. Your CCJ won’t show on your credit file if you pay it in full within 30 days.
If you manage to clear the CCJ within 6 years you can write to the credit reference agencies enclosing a “letter of satisfaction” from the issuing County Court to have the entry marked as “satisfied” on your credit file. This may be useful if you are applying for a mortgage, for example.