County Court Judgments (CCJs)
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What are County Court Judgments in business?
County Court Judgments (CCJs) are court orders that tells you to start making repayments towards a debt that you owe. A creditor might take this action against you to push forward with their efforts to reclaim their money.
You will have just over two weeks to respond to a CCJ. If you do not respond to the order in that time period, you could be asked to repay the debt at an unaffordable rate.
If this is aimed at your business, this could have serious implications for you and your status as a director. You must try t0 get on top of the situation as soon as possible.
CCJ’s are only used in England and Wales. Northern Ireland and Scotland follow different court processes.
Worried about your County Court Judgment?
If you are worried about how you are going to work towards your County Court Judgment (CCJ), we’re here to help you! There are many people who will be worried about CCJs. Here at Business Helpline, we can help you plan for a better future.
Call our team today on 0800 088 2142.
How should I respond to a CCJ?
A creditor must send you evidence of your debt in the post, providing details of that debt. This is called a ‘letter of claim’.
If you receive this letter, you will have 30 days to respond with the reply form that they provide. You must respond to the letter within that 30 day period or a creditor can begin court action against you.
In the reply form, you should:
▪️ Reply to the creditor
▪️ Fill in the financial statement, if you agree that you owe the money, and make a repayment offer if you cannot fully repay the amount
▪️ Inform the creditor that you are seeking help for the debt
▪️ Ask the creditor for more specifics, if required
The idea is for you and your creditor to agree towards some terms. If you can, court action can be avoided.
How do I know if I have received a CCJ?
If you do not have the relevant documents in the post, you can find out if a CCJ has been placed against you by:
▪️ Searching the Register of Judgments, Orders and Fines online
▪️ Getting a copy of your credit report
How does a CCJ affect my credit file?
A CCJ will show on your credit file for six years and it will be an obstacle when it comes to taking out further credit because lenders will see that CCJ.
Having County Court Judgments on your credit file makes it more difficult to take out more credit. It is important, therefore, to ensure that you can take the route to financial sustainability. That means dealing with your debt as quickly as you possibly can before moving forward.
Your CCJ will also be put onto a database called the Register of Judgments, Orders and Fines. This will also be visible for six years.
Can I remove a CCJ from my credit file?
If you have the money to pay off your debt upfront, this is very much possible.
You will have to pay the full debt within a month of the CCJ judgement. If you can provide proof of payment to the relevant County Court (the one who issued the judgement), you will be able to apply for a ‘certificate of cancellation’. You will need an N443 Application to get this process in motion.
Getting the N443 will cost £14 but you may be able to get it for free if your income is low. You can check your eligibility online.
Once the court is satisfied that you have paid your CCJ off within a month, they will get in touch with the Registry Trust and your judgment will be taken off the public register.
Can I remove a CCJ after my credit file if I cannot pay my debts back within a month?
If you are unable to repay your debt within a month of the judgment, you cannot remove your CCJ from the public register. It will remain on the register for six years. However, if you do fully pay off your debt at some point before the agreed schedule, you can apply for a ‘certificate of satisfaction’.
This process will not remove your CCJ from the public register but it will highlight that you have now paid that debt off. Such a detail could help lenders to obtain credit in the period before your CCJ is taken off the register.
Going into a CCJ will drastically affect your business’ ability to borrow money in the future. If you are able to fully repay the money that you owe within a month, you should absolutely do that. If that is not possible, the least you can do is commit to completing your CCJ within the six-year period. However, that CCJ will remain on your credit file for six years.
What is included in a CCJ?
Four forms should be included in a CCJ. These are the:
These pieces of information are usually printed on white or blue-and-white paper. The name of the form should be at the top with the form number in the bottom right corner.
In the top right corner, these forms have:
▪️The name of the specific court
▪️ Your name
▪️ The name of your creditor, followed by their account number or debt reference number
Particulars of claim
An N1 form will specifically note how much you owe in a section called the ‘particulars of claim’. This area highlights what the debt is. If this is not present with the N1 form, it can be sent separately.
If your form does not include all of the information noted above, you should get in touch with your creditor or court as soon as you can.
Can I appeal my CCJ?
You can choose to appeal the CCJ if you feel that the amount put against you is incorrect. This could be that you dispute the approximate figure of the debt lodged against you or your business, or you feel that the entire request it simply nonsensical. If you can prove either of these points in your favour, you may want to appeal your CCJ.
An application to appeal the CCJ should be made within 21 days of the decision. If you win the appeal, the CCJ will be taken off the register and will have no impact on you or your limited company.
What if my CCJ is unaffordable?
If you did not return the form in time, you could be asked to pay back more at a faster rate. Equally, you might feel as though the initial repayment requests could cause you some strain. In either case, you could either:
▪️ Request a change to the payment terms
▪️ Ask to have the CCJ cancelled, or ‘set aside’, if you feel it should not have happened
How long do I have to fill out the CCJ form?
You have 14 days to get the N9A or N9B form returned to your creditors. The exact deadline will depend on what the court has requested on the form. If you need more time and cannot reply via post, you should be able to get in touch online.
Am I personally liable for my business’ County Court Judgments?
You will not be personally liable for the debts of your company in a CCJ for your business. Obviously, though, the state of your business could have a detrimental effect on your personal situation if the CCJ limits lending opportunities and growth.
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County Court Judgment FAQs
You can. There is nothing to stop you becoming a company director if you have a personal CCJ on your name. Your personal financial record is legally separate from your company’s credit record. Therefore, there is no reason that your personal credit issues would affect a business’ financial health.
Lenders who ask for personal guarantees may be put off by your personal credit history. This could affect your ability to lend on behalf of the business.
Sometimes, you will need to file for a CCJ if a person who owes you money is not playing ball. This will start with an online CCJ application. The form that you fill out will ask for information about the creditor, debtor, and the reason for the claim in the first place.
Following the application submission, the debtor will be sent a letter from the court which explains what they owe to the creditor. They will then be given their opportunity to tell their version of events.
Once evidence has been collated from both sides, the County Court will make their verdict. If they feel that the debtor needs to pay-up, they will issue them with a CCJ.
The court will refuse your application if they are not convinced by the evidence you have provided to overturn the CCJ, the judgement will stand. Another judgment will be formed with the same details as the initial one. In other words, nothing will have changed.
The court usually sticks with the original judgement or sets it aside. They rarely make amendments at this moment in time.
A second hearing can be brought into play if the issue is a complicated one.
A CCJ cannot force you to repay debt. It is not protected by law. However, creditors can act again if you refuse to comply with the stipulations set out in the CCJ.
Creditors can send debt collectors, bailiffs and High Court Enforcement Officers (HCEOs) to chase you up for unpaid debts. They could also apply for an ‘attachment of earnings’ solution, taking a section of your salary or benefits package until your debt is fully repaid.
Bailiffs could also be called to your home, or business, to take items that equal to the value of your debt. These items will be sold on at auction. Bailiffs can return several times unless you intend to stick to a clear repayment plan.
Not paying a CCJ on behalf of your business could lead to your creditor pursuing a winding-up petition on behalf of your company. This would in turn lead to the possible liquidation of your business.
Even if a creditor does not pursue their debt, your credit file will state that you have an unpaid CCJ. This would add further damage towards any opportunity for lending during that period.
If you have returned all relevant forms, including the N9A Admission form, the creditor or court should come to an agreement on what you should be expected to pay towards your CCJ. The information you have given should help them to make a fair assessment of what you can afford to pay. Usually, those repayments will be made in monthly instalments.
If you continue to make the requested repayments on time, your creditor will not be able to do very much. A creditor could apply for a charging order to secure the debt against your home but such action would only affect homeowners. Creditors will not be able to do any other enforcement action, so long as you meet payment deadlines.
A CCJ will still be removed from your credit record after six years, even if you have not repaid the full amount of your debt in a CCJ. It will be too late for creditors to take enforcement action after the completion of those six years.
Nonetheless, the threat of enforcement will still be on the table until the end of that six-year period. It would not be wise to receive a CCJ and immediately consider not paying it. Such an act will leave you open to enforcement action from your creditor.
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