Understanding County Court Judgements

A County Court Judgement (CCJ) is a court order that can be issued against a borrower’s name if they fail to make repayments on a debt. They are used by creditors to reclaim the money owed, and can only be issued in England, Wales, and Northern Ireland– Scotland uses a different method called ‘enforcing a debt by diligence'.

When someone is unable to keep up with repayments on money they owe, or they have not reached an arrangement with their creditors to make up the missed payments, they could receive a County Court Judgement. A CCJ for credit agreements under the Consumer Credit Act must be preceded by a warning letter, such as a default notice or a letter before action, at least 14 days before any action is taken. The letter usually outlines steps the borrower can take to resolve the issue, and what could happen if it is left unresolved.

What Can I Do?

The warning letter should include information about what you can do to resolve the issue and what may happen if you don’t. When issued with a warning letter the recipient normally has two weeks to respond – during this time it can help to seek financial advice to tell you the appropriate course of action.

You should also attempt to reach an agreement with the creditors during the two weeks - if you ignore the warning, the CCJ will still be issued but the court won’t have heard your side.

When issued with a judgement you normally have two weeks to respond, in which you can either dispute the decision or admit the claim. If you are disputing the claim it may help to seek a financial advisor to help with the process, while if you admit the claim you should fill out an N9A admission form to provide details of income and expenditure, and an offer to repay the debt.

If the offer is accepted, the court should send a judgement setting out the rate at which you’ll make the repayments. If the offer is rejected, the court will send a judgement telling you how much you should pay as well as the rate you should pay at.

In cases where you cannot reasonably expect to afford the amount set out in the judgement, you can ask for a redetermination. This is where the court will re-evaluate your case before making a decision. Applying for a redetermination involves sending a letter to the County Court outlining why you are unable to make the payments, with financial evidence to support the claim.

Receiving a CCJ can be alarming, but responding quickly to the claim form may help resolve the situation.

What Happens Next?

If the borrower does not or cannot stick to the terms of the CCJ agreement, the creditor can ask the court to take further action:

Warrant of Execution – The creditor can ask the court to send bailiffs to collect either the owed money or any goods that could be sold to make up the money. The court will issue a Warrant of Execution to allow this to happen, however you can appeal for the court to stop the Warrant and allow you to repay the debt at a rate you can afford.

Attachment of Earnings – The creditor can also ask for the owed money to be taken directly from your wages, known as an Attachment of Earnings Order.

Charging Order – The debt may be secured against property you own, which could mean if you miss too many repayments they could seize the property to make up the money owed.

How Does This Affect My Credit Report?

A CCJ can stay on a credit report for six years if not paid off in full within 30 days of receiving it.

As lenders may look at past performance when assessing future credit or loan applications, a CCJ on your credit report can serve as an indicator of poor previous financial behaviour. If the borrower repays the money within the 6 years, the CCJ will be marked as satisfied.

Avoiding CCJs

The best way to avoid receiving a CCJ is to make repayments on owed money in full and on time every month. This type of credit history can indicate to lenders that you are financially responsible and may help improve the credit score the give you.

You can check your Equifax Credit Report & Score – which is free for the first 30 days then £14.95 monthly – for your credit history. If you do run into financial difficulties, there are organisations you can contact for help, such as the Citizen’s Advice Bureau or the National Debtline.