What is a CCJ?
A county court judgment is an order by the court requesting that money owed by a debtor is paid to the creditor. CCJs are recorded in the Register of Judgments, Orders and Fines (Register) for six years unless you pay the full amount in a month. Paying the debt early may alleviate difficulties when applying for credit or loans or being denied credit altogether or facing higher interest rates.
What is the process for CCJs?
Before a creditor applies for a CCJ, they must send a letter (sometimes known as a default notice or a Letter before action) to the debtor, warning that legal action may be taken if the outstanding debt is not repaid within a minimum of 14 days.
After the creditor has submitted a claim to the county court, the debtor will receive the following:
claim form - this provides details of the amount of debt which is being claimed, along with any interest
response pack - this includes an admission form (ie to accept that the money is owed), a defence form (ie to contest a claim) and an acknowledgement of service form (ie to confirm receipt)
A response must be made within 14 days of receipt of these forms - otherwise, a CCJ will be issued as a default judgment.
What are the options for responding to a CCJ?
The main options for responding to a county court judgment are:
pay the claim in full (including any interest and fees)
ask to pay the claim in instalments - if the creditor does not accept payment in instalments, the court will need to decide
dispute the claim or the amount owed
A CCJ will be recorded in the Register unless the claim is disputed.
How can a claim be disputed?
A claim can be disputed in several ways:
dispute of the amount claimed (ie admission that some money is owed but not the full amount claimed)
defence of the claim (ie no money is owing or creditor has already been paid)
The defence form contained in the response pack should be filled in to dispute a claim - and it is usually necessary to attend court. A decision will normally be reached on the day of the court hearing. It is possible to appeal the judgment within 21 days.
If a dispute fails, a CCJ will be recorded in the Register.
How is a CCJ removed from the register?
CCJs are generally recorded in the Register for six years. However, it is possible to remove a CCJ from this Register if the full amount owed is paid within one month from the date of the judgment.
If the full amount is not paid within one month, it will not be possible to remove the record for six years. However, once payment has been made in full, it is possible to mark the judgment as 'satisfied' (ie so that companies searching the records will see that payment has been made).
It may also be possible to ask the court to 'set aside' a CCJ if there is a genuine reason (eg if the claim form was sent to the wrong address) by using form N244. This will generally incur a court fee of £255.
Can you vary a county court judgment?
It may be possible to apply to vary a court judgment. This means that if you are unable to afford the payments that are ordered by the court, you can usually ask to change the terms of the order to be in line with what you can afford to pay.
If you want to vary the court judgment then you will have to apply for an application to vary the order. You can do this by filling out form N245. This can be a timely process as each case is assessed on an individual basis.
A judgment creditor may apply to the court to ask it to vary the terms of the order if:
there is evidence of a change in the defendant's circumstances
new information has come to light, or
there is other evidence to justify a change or higher rate of payment which was unknown when the order was made
Whether such a change will be permitted will generally depend on all of the facts, including the type of assets and the value of the judgment and the conduct of the proceedings, including the history of payments of instalments to date. However, in principle, it is possible to ask a court to replace an order for instalments with an order for, say, the sale of an asset/assets and the immediate satisfaction of the judgment.