County Court Judgment is a legal action creditors can take to try and recover money it is owed by you if you fail to make any arrangements to repay it.
After having been sent details by the court of how much the creditor says you owe; asking you for your financial details; whether you agree with the amount owed and asking you whether you want to make an offer, the court will set a hearing (in private) which you can attend if you want. If you don't make an offer and the court decides against you, it will either tell you to pay the full amount or make monthly payments.
Unless you pay the debt in full within one month, or apply and obtain an IVA, a County Court Judgment will be registered on your credit file and will remain there for 6 years.
To prevent a County Court Judgment from being registered on your credit file, you need to repay the full amount requested within one month or obtain an Individual Voluntary Arrangement (IVA). To find out more about how an IVA could help click here.
When you pay off the judgment you can apply for a Certificate of Satisfaction. There is a cost of £10 for court fees. This will then be placed on your credit file that will be seen by any lender you use to apply for credit.
How will you get to know about proceedings for a County Court Judgment?
The court will send you a 'Claim Form', showing you how much the creditor says you owe them, and the details of the claim (though these details can be sent separately up to 14 days later). This form gives you the opportunity to explain your situation to the court.
What should you do if you receive one?
You'll receive an Admission Form with the Claim Form, asking you about your income and outgoings. On the form you can make an offer to repay the debt (or a lower amount if you think you owe less than the creditor claims).
You have 16 days from the date of the postmark to send the form back to the court. Or you can submit an 'Acknowledgement of Service' or a 'Defence Form', depending on how you want to proceed
If the court decided in favour of the creditor who you owe money to, and you have been requested to repay the full amount, you can apply to the court to vary the order to a monthly payment you can afford. You can do this by filling in form N245, which can be obtained either from the court, or downloaded online, can do this. Generally there is a fee of £30 to be included with the Variation form; however, this can sometimes be waived if you are on a low income.
The court will pass the completed form onto your creditor for them to decide if the offer is acceptable or not, If the creditor refuses your offer, the court will take a look at your details and set a repayment the court believes you can repay. If the creditor accepts your offer, the order will be made for the amount you said you could pay.
What will the court do?
After the court hearing, the court may issue an order saying you must repay the debt. This order is called a County Court Judgment (CCJ) and will either be for the amount agreed between you and your creditor or, if you can't agree, a payment set by the court.
If you have judgments from more than one creditor, the court can combine your debts and make an 'administration order' - saying you must make a single payment every month to be shared by all your creditors.
What to do if you disagree with a County Court Judgment (CCJ)
If you have a genuine reason to disagree with a CCJ you can ask the court not to apply it straight away ('set it aside'). You may have to pay a fee for this. If you don't have a genuine reason, your application could be treated as wasting court time or even perjury - serious offences that can incur fines and prison sentences.
If the judgment is set aside, things go back to the start of the claim. You have another chance to reply to the Claim Form, and explain your situation. The CCJ is taken off the County Court Register until a new judgment is made.
How do you settle a CCJ?
You pay the creditor who made the claim against you, or their solicitor or representative who will accept your payments on their behalf. Once repaid you should ask the court for a certificate of Satisfaction.
What happens if you cannot pay?
If you pay nothing, or don't keep up with the payments, the creditor can ask the court to take steps to make you pay, in which case you may have to pay more costs. If you genuinely can't pay, even in stages, you can ask the court to:
- change the amount of the regular payments
- suspend the order until you can afford to pay
Ultimately the court can instruct bailiffs to come round to take possession of personal assets to recover the debt. For more information about bailiffs click here.
How does it affect you?
Organisations such as banks, building societies and loan companies use the registered information to help decide whether to give you credit or loans, like a mortgage. People with County Court Judgments (CCJ) are deemed to be a higher risk and may prevent you obtaining finance or will lead to lenders charging you higher rates of interest.
