CCJ

 

Understanding CCJs: Everything You Need to Know for Financial Peace

Are you familiar with CCJs? If not, don’t worry – you’re not alone. CCJ stands for County Court Judgment, and understanding what it means and how it can impact your financial peace is essential. In this comprehensive guide, we will take you through everything you need to know about CCJs.

Whether you have received a CCJ or are worried about the possibility, this article aims to provide you with clarity and guidance. We will explain what CCJs are, how they are issued, and what consequences they can have on your credit report and financial well-being. We’ll also delve into the process of challenging or resolving a CCJ, as well as provide tips on how to avoid getting one in the first place.

By the end of this article, you will have a comprehensive understanding of CCJs and the steps you can take to protect yourself and maintain your financial peace. So, let’s embark on this journey of knowledge and empower ourselves with vital information about CCJs.

What is a CCJ?

A County Court Judgment (CCJ) is a Court Order that can be issued in England and Wales if you fail to repay money you owe. This can happen if a creditor takes you to Court for not paying back a debt, and the Court rules in their favor. Once a CCJ is issued against you, it will be recorded on your credit file, affecting your credit score and making it challenging to obtain credit in the future. It is crucial to understand the implications of a CCJ and how it can impact your financial stability.

The presence of a CCJ on your credit file can stay there for six years, even if you pay off the debt in full. It is important to address a CCJ promptly and take the necessary steps to resolve it to minimize its long-term impact on your creditworthiness. Ignoring a CCJ can lead to further financial difficulties and limit your access to credit options, making it harder to secure loans, credit cards, or even a mortgage.

If you receive a CCJ, it is essential to act quickly and seek advice on how to deal with it effectively. Understanding the process of challenging or paying off a CCJ can help you navigate this situation with greater confidence and protect your financial future from lasting damage.

The different types of CCJs

There are different types of CCJs such as

• Judgments entered by admission – where you received the Claim Form (legal proceedings) and you have accepted that you are liable for the debt and proposed a payment to the Court. This cannot be set aside/removed since you have admitted to the Claim.

• Judgments entered at a hearing – where you received the Claim Form and filed a Defence to the Claim, attended a hearing but the judgment was issued in favour of the creditor or the Claimant. This kind of judgment would need to be appealed at the Court if the Court provides permission to do so.

• Judgments entered by default – where you did not receive the Claim Form and the judgment was awarded to the creditor or Claimant in default due to no response to the Claim by you etc. This is the most common type of CCJ which can be challenged and you can apply to set aside/remove this judgment where you have legal grounds to do so.

The Civil Procedure Rules have provisions where you can apply for a judgment to be set aside/removed however, these provisions only apply to judgments entered by default.

How does a CCJ affect your credit score?

A CCJ can have a significant impact on your credit score and overall creditworthiness. When a CCJ is registered against you, it indicates to lenders that you have a history of not repaying debts as agreed. This red flag can make it challenging to access credit products such as loans, credit cards, or mortgages, as lenders may view you as a higher risk borrower.

Having a CCJ on your credit file can lower your credit score, making it harder to qualify for favorable interest rates or credit limits. It can also affect your ability to rent a property, as landlords often conduct credit checks as part of the screening process. Additionally, a CCJ can impact your employment prospects, as some employers may check credit reports as part of their hiring process, especially for roles that involve financial responsibilities.

To mitigate the negative impact of a CCJ on your credit score, it is essential to address the judgment promptly and take steps to resolve it. By demonstrating a proactive approach to managing your debts and fulfilling your financial obligations, you can gradually rebuild your creditworthiness over time.

How to check if you have a CCJ?

Checking whether you have a CCJ registered against you is a crucial step in managing your financial health and credit status. You can find out if you have a CCJ by accessing your credit report from one of the major credit reference agencies, such as Experian, Equifax, or TransUnion. Your credit report will provide detailed information on any CCJs filed against you, including the amount owed, the name of the creditor, and the date of the judgment.

It is recommended to review your credit report regularly to stay informed about any changes or updates that may impact your creditworthiness. If you discover a CCJ on your credit file that you were not aware of, you should investigate the matter further and seek legal advice if needed. Resolving any discrepancies or inaccuracies on your credit report can help prevent any unwarranted damage to your credit score.

In addition to checking your credit report, you may also receive a formal notification from the Court if a CCJ is issued against you. It is important to respond to any legal correspondence promptly and seek guidance on the appropriate steps to take in addressing the judgment.

Steps to deal with a CCJ

Dealing with a CCJ can be a stressful and challenging process, but taking proactive steps can help you navigate the situation effectively and protect your financial well-being. Here are some key steps to consider when dealing with a CCJ:

There are two legal grounds to set aside/remove a CCJ.

1. CPR 13.2 (mandatory grounds). A CCJ must be set aside if it was issued to the wrong address or where you filed an Acknowledgment of Service or a Defence within the timeframe or where the Claim was paid in full before the judgment was entered.
2. CPR 13.3 (discretionary grounds). A CCJ may be set aside subject to the Court’s approval where the Claim was issued to the last known or usual address (this can be a previous address) but you have a real prospect of successfully defending the Claim or you have a good reason for the judgment to be set aside (you didn’t receive the Claim as it was sent to a previous address) or you should be allowed to defend the Claim.

There are also two ways you can apply to remove a CCJ.

Option 1

A Draft Order agreement can be agreed where you are willing to pay the balance on the condition that the CCJ is removed. If this is the case then we can draft the Draft Order and propose this to the Claimant or provide you with a copy of this for you to agree this directly with the Claimant.

If the Claimant is agreeable to this then they would sign and return the Draft Order. You would then need to sign this and send this to the Court for approval. The Court fee for the Draft Order is in the sum of £119.00 per CCJ which would need to be paid directly to the Court after the Draft Order has been sent to the Court for approval.

Once the Draft Order has been referred to a Judge, the Judge may do any of the following:

• Approve the Draft Order. If approved, the Court will write to you via post and provide you with the sealed copy of the Order and remove the CCJ. You must then pay the outstanding balance to the Claimant and that is the end of the matter.

• Defer the Draft Order. If this is deferred then the Court will write to you and provide a reason for the deferment. Usually this is where the Court requires more evidence from you to understand your grounds.

• Reject the Draft Order. Whilst the Court very rarely rejects a Draft Order, the Court does have the power to do this. Nevertheless, where the Draft Order is rejected, the Court will write to you and inform you as to why it has been rejected.

The approximate timescales for the Draft Order can be 3-4 months depending on the Court’s backlogs. There is no Court hearing for Option 1 the Draft Order route.

Option 2

If the Claimant does not agree to Option 1 or if you dispute the Claim in full and do not intend to make any payment proposals then the only way you can challenge the CCJ is by filing an N244 Application to set aside the judgment.

We can draft the Application and the Witness Statement however; you would need to sign and file this at the Court and pay the Court fee in the sum of £303.00 per CCJ. Once this has been paid, the Court will process your Application and list this for a hearing (most likely a telephone hearing) where the Court would decide whether the CCJ will be set aside or not based on your grounds, evidence and circumstances.

The Court will also consider promptness and require you to file an Application to set aside the CCJ within 30 days of the judgment being entered against you and in some cases (where you have only just become aware of the CCJ), within 30 days of you becoming aware of the judgment. If you are beyond the 30 days then promptness is the Court’s discretion and only the Court can decide whether it deems your Application to be prompt or not.

The approximate timescales for the Application to be listed for a hearing can be 3-9 months depending on the Court’s backlogs.

Taking proactive steps to address a CCJ can help minimize its impact on your credit score and financial stability and you can work towards resolving the judgment and rebuilding your creditworthiness over time.

Removing a CCJ from your credit record if it has been paid within one month of the judgment date

While a CCJ can stay on your credit file for six years, there are steps you can take to have it removed sooner under certain circumstances. If you have paid off the CCJ in full within one month of the judgment date, you have the right to apply for a Certificate of Satisfaction from the Court. This certificate confirms that the debt has been settled, and you can provide it to the credit reference agencies to update your credit file and remove the CCJ.

It is essential to keep documentation of any payments made towards the CCJ and communicate with the Court and credit reference agencies to ensure the accurate reporting of your credit status. By taking proactive steps to address and resolve a CCJ, you can work towards improving your creditworthiness and financial stability in the long term.

Can you get a mortgage with a CCJ?

Having a CCJ on your credit file can make it more challenging to qualify for a mortgage, as lenders may view you as a higher risk borrower. However, it may still possible to secure a mortgage with a CCJ, depending on the lender’s criteria and the specifics of your financial situation. Here is a factor to consider when applying for a mortgage with a CCJ:

1. Specialist Lenders: There are specialist lenders who cater to individuals with adverse credit histories, including CCJs. These lenders may offer products specifically designed for borrowers with CCJs, albeit with higher interest rates or stricter terms.

By exploring different mortgage options and working with specialist lenders, you may still be able to secure a mortgage with a CCJ however, we would recommend that you challenge a CCJ where you have legal grounds to do so to improve your chances of obtaining a mortgage with better interest rates.

How to avoid getting a CCJ in the future

Preventing a CCJ from being issued against you requires proactive financial management and responsible borrowing practices. Here are some tips to help you avoid getting a CCJ in the future:

1. Stay Organized: Keep track of your debts and payment deadlines to avoid missing any payments that could lead to a CCJ. Set up reminders or automatic payments to ensure that you meet your financial obligations on time.

1. Communicate with Creditors: If you are struggling to repay a debt, communicate with your creditors early on to discuss alternative payment arrangements. Many creditors are willing to work with you to find a solution that fits your financial circumstances and prevents legal action.

1. Seek Financial Advice: If you are experiencing financial difficulties or facing challenges in repaying your debts, seek advice from a debt advisor or financial counselor. They can provide guidance on managing your finances, negotiating with creditors, and avoiding the escalation of debt issues.

By staying proactive and informed about your financial situation, you can take steps to prevent the issuance of a CCJ and protect your credit score and financial stability. Building healthy financial habits and seeking assistance when needed can help you navigate challenging financial situations and maintain control over your financial well-being.

Seeking professional help for CCJs

Dealing with a CCJ can be overwhelming, especially if you are unsure of the best course of action to take. In such situations, seeking professional help can provide valuable guidance and support in resolving the judgment effectively. Please contact us as soon as possible if you have a CCJ and if you have legal grounds to challenge the CCJ. We will conduct a free case review in order to establish your grounds and options to challenge the CCJ.

Seeking professional help for CCJs can alleviate the stress and uncertainty associated with dealing with a judgment. By leveraging our expertise and resources, you can navigate the complexities of a CCJ and work towards a resolution that safeguards your financial future.

Conclusion

In conclusion, understanding CCJs and their implications is crucial for maintaining your financial peace and creditworthiness. A County Court Judgment can have lasting effects on your credit score, access to credit, and overall financial stability. By familiarizing yourself with the process of dealing with a CCJ and taking steps to prevent future judgments, you can protect yourself from the detrimental consequences of unresolved debts.

Remember to stay proactive in managing your finances and seek professional assistance when needed. By addressing CCJs promptly and responsibly, you can work towards rebuilding your credit score, securing financial stability, and achieving peace of mind in your financial journey. Empower yourself with knowledge, take control of your financial health, and navigate the challenges of CCJs with confidence and resilience. Contact us today for a free case review by clicking here.