Dealing With A Personal County Court Judgment (CCJ)

If you owe someone money and are unable to repay the liability then the individual or company that you are indebted to (creditor) could take you to court and try to obtain a county court judgment (CCJ) against you. If this were to happen, it could make it difficult for you to obtain credit for a number of years.

What process must the creditor follow prior to obtaining a CCJ?

Your creditor will warn you in writing that legal proceedings will be taken against you should you not repay the outstanding debt within a certain timescale. This is either in the form of a "letter before action" or a "default notice" based upon the sort of debt. If the credit agreement that you entered into comes within the Consumer Credit Act then a default notice has to be sent a minimum of 14 days before your creditor takes legal action. You will be informed how the default can be resolved but if you are unable to do so it will be explained the potential action that can be taken against you. Your creditor will also provide you with a default information sheet issued by the Financial Conduct Authority.

If you do not come to a satisfactory repayment arrangement or clear the outstanding debt within the timescale laid down then your creditor can apply to the County Court (usually these are processed centrally through the County Court Business Centre in Northampton) and ask it to intervene. The court will send you a claim form that details how much you owe the creditor as well as a response pack that contains an admission form, defence form and an acknowledgement of service document.

How long do you have to reply to the claim form?

The court gives you 14 days to respond to the claim. 

What options do you have when responding to the claim form?

If you accept that you owe the money then you would complete and send the admission form direct to your creditor. This form provides information about your financial circumstances. The form enables you to offer to repay the debt in installments. If your creditor accepts your repayment proposal your creditor will ask the court to register a County Court Judgment (CCJ) confirming how, when and where payments are to be made in the Register of Judgments, Orders and Fines. If your creditor does not agree with what you are offering the court will be asked by your creditor to make a decision on an acceptable repayment amount.  

If you dispute owing any money then you fill in the defence form and return it to the court along with the acknowledgement of service form for the court to reach a decision.

If you feel you only owe part of the amount being claimed then you would return the completed admission form and the defence form to the court to make a decision.

The court's ruling can be challenged.

What action can be taken against you if you don't maintain the CCJ terms?

At the request of your creditor, the court could issue a Warrant of Execution that could result in a bailiff visiting you to collect funds from you or cease goods. A Charging Order could be secured against a property that you own or an Attachment of Earnings Order could be issued by the court so that monies are deducted from your earned income and paid to your creditor.

Is your credit history affected?

If you pay off the debt within 1 month the judgment will be removed from the Register of Judgments, Orders and Fines and your credit rating will not be affected. 

If you fail to completely clear the CCJ within 1 month of the judgment being received then it will remain on the above register for 6 years. However, if you pay off the debt after 1 month then you can ask that the register show that you have "satisfied" the liability. In either of these situations, it could have a negative impact on your credit history and make it difficult to borrow money or obtain a contract mobile phone for many years. Even if you can arrange a loan or obtain a credit card the interest rate that you will pay is likely to be higher than what would normally be charged. 

Obtaining advice

You may wish to seek advice from a debt charity or the Citizens Advice Bureau if you are faced with a creditor seeking a CCJ.