County Court Judgements Explained
Having a County Court Judgement or CCJ issued against you will have a severe impact on your credit rating. It signifies that you have had serious problems paying back a loan or other form of credit, to the extent where your creditor has had to take court action against you to try and recover the debt.
It Starts With a Letter
If you get into arrears and fail to come to a repayment agreement, your creditor may decide that pursuing a CCJ is the only option. The first you’ll hear about it is when you receive a ‘Claim Form’ through the post. Your local county court mails these out. This form will set out the details of the claim. The name of the creditor is shown along with the amount they claim you owe.
If you were unaware of the debt, for instance if you’d moved house and lost contact with the creditor, then repaying the full debt now will stop proceedings going any further. If you can’t clear the debt, then you should fill out an ‘Admissions Form”. This will also have been included with the letter.
This form asks for information about your income and expenses, which the court will take into account when hearing your case. You must return the Admission Form within 16 days of the postmark. If you plan to dispute or defend the claim, you can apply to have the hearing delayed 14 days. This will allow you time to prepare your defense.
Time for the Hearing
Once you’ve returned the forms to the court, there will be a simple hearing carried out in private. You don’t have to attend the hearing unless you plan to dispute aspects of the claim.
At the hearing, the court will objectively review the claim and the information you’ve provided. A decision will be made about the amount of money, if any, you owe, and how it should be repaid. It’s important to note that no one is being found ‘guilty’ or ‘innocent’ here. The court is simply trying to fairly resolve a civil financial dispute.
If the court upholds the claim against you, then the court order or CCJ is issued. Even at this stage you can stop the damage to your credit record. You’ll have one month from the date of the court hearing to repay the debt in full to stop the CCJ being put on record.
After a month, the CCJ will be entered on to the Register of County Court Judgements. From there it will make its way onto your credit files held by the various credit reference agencies.
The Credit Impact
The presence of one or more CCJs on your credit file will effectively close off most kinds of finance to you. Most lenders will be very reluctant to advance credit to people in these circumstances. Once you’ve cleared the debt, then the judgement will be marked as ‘satisfied’. While this will not remove it from your record, it’s a lot less harmful to your credit than an uncleared CCJ.
If you have a CCJ on your record, there will be companies promising to remove it from your credit file. Unfortunately, this is only feasible in a few cases. Sometimes, the CCJ is entered on to your record by mistake even though you cleared the debt within the one month time limit. If this has happened then you have the right to have it removed from your records.
The only other way to have a CCJ removed is to show that there was something wrong with the way in which the judgement was awarded. For example, can you prove you didn’t receive the initial Claim Form? Is so, you would have been unaware of the proceedings. That means in turn you didn’t have the chance to defend yourself and so the judgement is invalid.
In these circumstances, you can apply to the court to ‘set aside’ the judgement. It will be removed from your file, with the whole process starts again with a new claim and hearing. Any attempt to gain a ‘set aside’ without a reasonable argument could be seen as wasting the court’s time, with all the legal penalties that would entail.
You Are Not a Criminal
If you receive a Claim Form through the post, it’s important not to panic. Although a County Court Judgment against your name is harmful to your credit rating, it isn’t a criminal matter. It won’t lead to further action such as repossession of your home or bankruptcy. The CCJ procedure is there so that the court can help to resolve your debt in a way that is fair to both you and your creditor.