A CCJ is a type of court order in England and Wales. It can have a significant impact on your credit score. This can make it difficult to get credit, rent or borrow money in the future. If you have unpaid debts, it’s possible that you may be legally required to settle them.
Our guide to CCJs explains what exactly a County Court Judgement is, what happens if one is registered against you, and what you can do to solve the problem.
What is a CCJ?
CCJ stands for County Court Judgement. A CCJ is a court order in England and Wales that’s issued against you if you haven’t kept up repayments to a creditor. A creditor may apply for a CCJ against you if they aren’t confident that you will repay the money you owe. Before sending a CCJ a creditor will send you a default or warning notice. This means that a CCJ is something of a last resort if they haven’t heard from you about settling the debt.
The process begins when you receive a County Court claim form. You have a limited timeframe in which to respond to reach an agreement – normally around two weeks – - before you’re issued with a CCJ.
A CCJ can have a long-term impact on your credit record and affect your chances of getting credit or a loan for many years to come. It’s important you address it in the right way, by responding promptly.
How do you get a CCJ?
If you’ve received a CCJ, it’s unlikely to have come as a total shock. Your creditor must try to come to an agreement with you before starting any court action. They will send you a letter of claim form detailing your options. You’ll have 30 days to respond before you receive a default notice.
Receiving a default notice
If you’re unable to reach an arrangement, your creditor must then send a default notice. A default notice acts as a warning letter, informing you that you must pay what you owe, or it will be escalated to legal action.
If you don’t respond to this letter, or you are still unable to resolve, you will be issued a CCJ form.
What to do if you get a CCJ claim form
There is a step-by-step process when responding to a CCJ, and it’s important to follow it correctly. The CCJ will include details about the amount you owe, what it’s for, and an outline of the three response options you have.
1. Pay the debt as per the terms stated in the CCJ
If you get a CCJ for money that you owe, you will need to pay it back. The judgement will explain how to pay your County Court Judgement – you will either be asked to pay in full or in instalments.
You must pay back the money to the business or person that you owe, rather than the court. Don’t forget to keep recorded proof that you’ve paid.
2. Request to have the terms changed
If you think you’ll struggle to pay the monthly repayment amount, you can apply to have the terms changed – or ‘vary’ the judgement. It can be done by completing court form N245. You will need to give details on your income and spending, and highlight how much you can realistically afford to pay. You may also have to pay a court fee.
3. Apply to have the CCJ cancelled
If you believe the CCJ has been issued in error, or you’ve already paid off your debt, you can apply to have it cancelled using the ‘set aside judgment’ form N244. You may have to pay a court fee of £275 and go to a private hearing to demonstrate why you do not owe the debt.
How to check if you have a CCJ
You can check if you have any County Court Judgements in two ways:
- Get a copy of your credit report. Lenders have full visibility of your credit report too, as it helps them to decide whether they’ll lend to you. You can check your credit report easily online for free with a credit reference agency like Experian or Equifax.
- Search the Register of Judgements, Orders and Fines
Having a CCJ on your credit report can hinder your chances of getting credit such as a loan or mortgage, as well as products like insurance or a mobile phone contract. But there are some things you can do to improve your credit score, such as paying on time for things like credit cards, bills and monthly rent.
What happens if I ignore the CCJ?
You should never ignore a CCJ. Ignoring it will not stop the court from issuing the judgment, and you may be subject to further legal action. This could include asking you to repay the debt in full immediately (called ‘forthwith’ in the court order) or at a monthly rate higher than you can afford.
If you receive a CCJ but are unsure about what to do, it’s important to seek advice as soon as possible. Remember, debt help is available from charities like Step Change.
Failing to agree repayment terms with the creditor will result in the court deciding an amount you are liable to pay. Bear in mind that the letter of claim you receive is your chance to have a say on your situation. If you ignore the letter of claim, the CCJ will still be made against you.
Send back the reply form to the creditor in good faith and there is a chance you may be able to discuss arranging a repayment plan without getting the court involved – which will be better for everyone in the long run.
What is the deadline for responding to a CCJ?
After receiving a CCJ, you have 14 days from the start of legal proceedings to take action, unless you’re asking for an extension. You’ll need to fill in the reply form with your income and payment information.
How long does a CCJ last?
A CCJ remains on the Register of Judgements, Orders and Fines for six years. It will also show on your credit file for six years from the judgement date. While it’s on record, it can make obtaining financial services such as loans and mortgages very difficult, as many banks will refuse credit to people with outstanding CCJs or a poor credit history.
If you pay off the full amount owed within one month, you can get the judgement removed from the register. If you pay it back after one month, you can have it marked as ‘satisfied’ in the register. It will still appear on the register for six years, but it will show that you’ve paid.
Who sees a CCJ?
The CCJ will be added to the Register of Judgements, Orders and Fines. This is a public database, so anyone can search it. For a small fee anyone can check your name, address, case and court number, as well as the amount of money you owe. But it will not detail who you owe the money to.
Can you get a mortgage with a CCJ?
Yes, it is possible to get a mortgage agreement if you have a CCJ. Your chances of success vary depending on:
- How long ago the CCJ was issued
- Whether or not the CCJ is ‘satisfied’ and for how long
- The amount you owed when issued with a CCJ – this could affect the loan-to-value ratio of your mortgage and present higher risk to lenders
- If you have one or more CCJs.
You could talk to an independent debt adviser for help with any issues regarding your CCJs if you’re applying for a mortgage.
Applying for a loan with a CCJ
Having a CCJ on your credit file may impact your ability to get credit, as lenders may not be confident you can make repayments. Depending on the lender and how much you want to borrow, it may still be possible to take out loans with a CCJ. Though you may face unfavourable terms – like higher rates.
FAQ
Do you get notified before a CCJ letter arrives?
You probably won’t receive an explicit notification that a CCJ letter is on its way, but lenders will send a default or warning notice before they send a CCJ. If you are sent a default or warning notice, you should take that as final warning that a CCJ letter will arrive if you don’t settle your debts.
Does a soft credit check show a CCJ?
Yes, a soft credit check shows CCJs. Although a soft credit check does not harm your credit score, it still shows lenders publicly available information, including any outstanding debt you may have.
How long does a CCJ stay on your credit file?
A CCJ will stay on your credit file for six years from the judgement date. This means that lenders will be able to see that you have a CCJ if you apply for a loan during this time. After six years, your CCJ is removed from the register and your credit file. This is still the case even if you have not paid it off yet.
Is a CCJ a criminal conviction?
No, a CCJ is not a criminal offence, and you will not be sent to prison if you are unable to pay your CCJ. It’s a decision by the court, which can lead to legal proceedings.
Even if you have a CCJ, there are various ways you can improve your credit rating. Read our blog to find out more.
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