What is a CCJ? All you need to know

A CCJ is a County Court Judgement, and it’s a court order that instructs you to repay money you owe to a creditor. It’s an action that can be taken against you if you’ve failed to repay a debt following a letter and a default notice, and it is something that must be taken seriously. If you live in Scotland, it works slightly differently and you would instead be served with a decree, although the process is very similar.

If you do receive a CCJ claim letter, you shouldn’t panic. If you take the necessary action, you’ll be able to respond and it will be a fairly straight-forward process.

What to do when you receive a CCJ claim form letter

The first time you’ll normally hear of your CCJ is when you receive a claim form letter in the post. While it’s nothing to get too stressed by, you do need to respond promptly, so make sure you are opening your post.

The claim pack will be made up of four forms. It’ll give you the details of what you owe, and information on how to respond. The final two forms are an Admission, where you are admitting the debt and your personal circumstances, and a Defence and Counterclaims form, to be used if you don’t actually believe you should have to repay. You can either admit to the debt, contest it, or inform the court that you intend to defend yourself but need more time to prepare.

You need to return these within 14 days, but the exact deadline will be printed on your forms – you’ll have been given a few days’ leeway for the pack to have been delivered to your home. On the form, you’ll need to have provided information on your personal financial circumstances, as these will be used to determine the judgement.

Receiving the judgement

If you’ve admitted the debt, your case will be reviewed and you’ll either be instructed to repay the debt in monthly instalments, or there will be a “judgement forthwith” and you’ll be told to pay it in full. If you’ve admitted the debt and made an offer to repay what you can each month, this will usually be accepted.

If you’re defending yourself, the court will review your claim and either respond to the creditor to inform them they don’t have a case, or will make a judgement against you. Finally, if you’ve decided not to respond, or you don’t reply in time, then a “judgement in default” will be made which could still either be in instalments or a judgement forthwith.

The impact on your credit file

A CCJ will last on your credit file for six years. During this time, any lender will be able to see you’ve had a CCJ in the past, and it’ll make getting any new credit a lot more difficult. You’ll be able to take steps to repair your credit score over time, but make sure you’re in control of your debts. You should look at getting debt advice to see what options could help you manage your payments.

Getting a CCJ while on a DMP or TPP

If you’re already on a Debt Management Plan (DMP) then it is still possible for a lender to issue a CCJ against you. There’s nothing you can legally do to stop this but, by already being on a DMP, you’ve shown your creditors that you’re willing to pay what you can afford.

If you’re on a Token Payment Plan (TPP) then it’ll be clear to your creditors that you can’t afford more than you’re already paying towards your debts. Technically they could still pursue court action but there’d be little point as it’s exceptionally unlikely that the court will then ask you to pay more than you already are.

If you fail to comply with a CCJ

Once you’ve received the judgement, it’s really important that you make the payments that you’ve been asked to. If you don’t, then you could be subject to one of three actions to help your creditor get back the money you owe them.

The creditor could apply or a bailiff to collect the debt. Once the Warrant of Execution is granted by the court, a bailiff would then visit your home or business to collect the money you owe, or to seize your possessions to be sold to help repay the debt.

Alternatively, you could be given an Attachment of Earnings Order, which instructs your employer to deduct the money you owe directly from your wages.

Finally, you could be given a Charging Order against any property you own, including your home. This could mean you’ll lose the property.

If you’re struggling to keep up with the payments in the CCJ, you should seek free debt help immediately.

Lesley-Anne Robinson

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