A county court judgment (CCJ) is a court order made against you if the court rules that you have to pay back money that you owe to a person or business.
CCJs can have a big impact on your credit rating. A CCJ on your file can make it very difficult to get approved for new lending – even a new mobile phone contract – and might lead landlords to turn down an application to rent a property.
You may also be subject to an ‘attachment of earnings order’ in which some of your salary is paid directly to your creditors to service your debts, reducing your monthly income.
For all of these reasons, it’s important to understand the basics of what a CCJ is, and what happens next when you have an unpaid CCJ on your credit record.
what to do when you receive a CCJ claim form letter
Before a CCJ is made against you, your creditor should give you a fair opportunity to settle your debt without any court action. That’s where the CCJ claim form letter comes in.
Your creditor should write to you before taking court action, and should tell you:
- How much you owe (and how this has been calculated)
- How you can pay what you owe
- How to contact the creditor to discuss the debt
- Where you can get debt advice
It’s possible that you do not owe the money. If you know you have recently paid the debt in full, it’s still a good idea to respond, rather than assuming the claim will just go away.
how to respond to the CCJ claim
Your response to the CCJ claim should be detailed and organised. You should include the following:
- Agree that you owe some, all or none of the debt
- Make an offer of full or partial payment
- Include a ‘statement of means’ form (more below)
- Request more information if needed
A ‘statement of means’ outlines your personal circumstances, including your monthly income and essential household expenses, as a way to show how much you can afford to pay.
Don’t be daunted by responding to a CCJ claim. Your response is your opportunity to put your side of the story, confirm how much you owe and start working towards clearing the debt without declaring insolvency.
deadline for replying to a CCJ claim form
The standard deadline for replying to a CCJ claim form is 30 days from the date at the top of the letter. Remember to allow several days for your response to be delivered, if you send it by post.
After you reply, your creditor should give you notice if they still plan to start CCJ proceedings against you. This should include:
- 14 days’ notice before starting the CCJ claim
- At least 30 days after receiving your reply
If you requested more information from the creditor about the debt you owe, they should allow a minimum of 30 days after sending you the additional documents – so asking for clarification can give you a little longer to pay your debts.
receiving the judgment
If a CCJ is made against you by the court, you should receive a copy in the post. This will list the details of the CCJ:
- How much you owe
- How you can pay (in instalments or in full)
- When you should pay
- Where to send payments
You can ask the court to change the repayment terms if you don’t think you can afford the amount they have asked for, or if the CCJ demands payment in full and you can only afford to repay in instalments.
if you don’t keep to the terms of a CCJ
It’s important to stick to the terms of your CCJ. Even if you want to raise a dispute, you should continue to make the monthly payments in the meantime, if you are able to do so.
Failure to keep to the repayment schedule of a CCJ can lead to additional court action as your creditors try to force you to pay what you owe.
So if you have an unpaid CCJ, what happens next?
attachment of earnings order
An attachment of earnings order is one way the courts can force you to pay the instalments on your CCJ, by deducting the amount directly from your wages or salary.
This only happens if you have failed to keep up with the terms of the CCJ yourself – which is why it’s so important to keep making your monthly payments, even during a dispute or renegotiation.
If your creditor applies for an attachment of earnings order, you will receive an N56 form from the court, asking for details of your current employment.
You only have eight days to respond to this (including the time taken for your reply to get through the postal system) so it’s crucial to reply quickly – contact us if you need help with this.
how a CCJ affects your credit record
CCJs appear on your credit record. This can make it difficult to get approved for mortgages, loans and overdrafts, credit cards, mobile phone contracts and even to rent a property.
A CCJ will normally stay on your credit file for six years. If you are able to pay in full in less than a month, you can apply for the CCJ to be cancelled and removed from the credit register.
Once you pay off a CCJ, it is ‘satisfied’. If you clear your CCJ anywhere between the one-month and six-year mark, you can apply for a certificate of satisfaction, which may be enough to persuade some creditors to approve new lending.
For advice on CCJs and any of the issues raised on this page, contact Care About Money today and we will be happy to help.
