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When you’re in debt, your creditor (the individual or business you owe money to) may apply to the court to issue a County Court Judgment (CCJ) against you, forcing you to repay what you owe in full or in regular instalments.
However, once a court order has been made against you for an unpaid debt, you will only have a short space of time (usually 14 days) to respond before the judgment is officially enforced by the court and is recorded on your credit file for six years.
This guide will outline everything you need to know about the CCJ enforcement process, from how a CCJ is enforced to what can happen if you ignore a CCJ.
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A County Court Judgment (CCJ) is a type of court order that may be handed down to you (the judgment debtor) by the court if your creditor has resorted to legal action to recover the money they are owed.
Typically, a CCJ will only be issued after your creditor has failed to recover the money through other means or has been unsuccessful in reaching a mutually beneficial agreement without the court getting involved.
When you receive a CCJ, it means the court has formally decided you must repay the debt according to their terms. Responding to a CCJ can give you a chance to explain your financial situation and potentially negotiate monthly payments based on what you can comfortably afford.
There is no minimum debt level required to apply for a CCJ, and it is up to your creditor to decide whether a debt is worth pursuing through legal action.
However, if you have defaulted on a debt or failed to meet the terms of an agreed repayment plan, your creditor will likely apply for a CCJ to ensure the receive they money they are owed.
For credit agreements regulated by the Consumer Credit Act 1974, your creditor must warn you of upcoming legal action at least 14 days before they can apply to the court for a CCJ. This is to give you a final chance to come to an agreement to repay what you owe without the court getting involved.
When you receive a CCJ, it will be recorded on your credit file for six years (unless you repay the full balance within one calendar month).
During this time, your credit score will be negatively impacted and you will struggle to be approved for further credit, such as a loan, mortgage, bank account, or even a phone contract.
This is because, lenders check your credit report when deciding whether to let you borrow money, and a CCJ indicates you have struggled to make repayments in the past. This could lead them to believe you are a risky borrower and will struggle to make repayments if you were to borrow again.
Some employers and letting agents may also check your credit file when you apply for a job or to rent a property, and evidence of a CCJ can make them less likely to want to proceed with your application.
The CCJ enforcement process can differ slightly between courts, but typically follows the following steps:
Before a creditor can apply to the court for a CCJ, they must serve you with a type of written warning known as a default notice.
This is a formal letter warning you that legal action will be taken unless you pay the outstanding balance within 14 days.
However, if you are able to pay the outstanding balance within this timeframe, the CCJ won’t be enforced and any legal action will be stopped in its tracks.
Failure to respond to a default notice or pay the outstanding balance will lead to you being issued with a claim form.
The purpose of a claim form is to let you know that you’re being taken to court over an unpaid debt and should respond as soon as possible (ideally within 14 days) confirming you owe the amount stated and outlining how you plan to repay it.
Once you’ve sent your response, the creditor will decide if they’re satisfied with your offer of payment and make a final decision.
Not responding to a claim form won’t prevent the CCJ from going ahead, but it will mean your financial circumstances aren’t taken into account and you may be required to pay the outstanding balance in full or make monthly payments that are more than you can comfortably afford.
The final step in the CCJ enforcement process is being issued with a judgment, which will be issued in monthly instalments or forthwith (meaning the full amount is due immediately).
Once you have been served with a CCJ, you will have 14 days to ask the court for a redetermination to review their decision.
However, because you will have had multiple opportunities to explain your financial circumstances throughout the enforcement process, you will be expected to stick to the repayment terms laid out in your judgment.
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The CCJ enforcement process involves various court costs at different stages.
For example, depending on how much is owed and how much interest has been added, it typically costs between £50-£100 to obtain a CCJ from the court. This court fee covers the cost of filing paperwork, service charges, and other general administrative costs.
Furthermore, while there is no cost to transfer a CCJ from the County Court to the High Court, there is a cost of £71 to obtain a Writ of Control, which gives High Court Enforcement Officers (HCEOs) the power to seize assets to settle an outstanding debt.
However, it’s worth remembering that a High Court Enforcement Officer can only get involved if the CCJ is for a debt of over £600 that is not regulated by the Consumer Credit Act. This means that HCEOs can’t enforce personal loans, credit cards, and overdrafts, but can enforce utility arrears, business debts, and rent arrears.
After a creditor applies to the court to issue a CCJ against you, they may require further information about your financial situation, including your income and assets, to help them decide what action to take next. This is known as an Order to Obtain Information (formally an Oral Examination).
When this happens, you will be sent an ‘order to attend court for questioning’ (Form N39), giving you a date to attend a court hearing to answer a series of questions about your individual circumstances. Usually, you will be given a minimum of 14 days to prepare for the hearing.
However, failure to answer any of the questions presented to you or attend court without good reason can lead to you being held in Contempt of Court and, in some cases, arrested and sent to prison.
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Whether you don’t agree with the judgment proposed or don’t believe you owe the money, ignoring a CCJ can cause serious problems. This could include:
Third Party Debt Orders are a type of enforcement action your creditor may take if you fail to make agreed payments towards a CCJ.
With a Third Party Debt Order, the money in your bank account or building society can be frozen to prevent you from accessing it before being used to pay your creditor what they are owed.
County Court bailiffs can visit your property on behalf of your creditor to collect money owed or seize goods worth the value of the debt contained in the CCJ.
However, bailiffs must give you at least seven days’ notice before visiting your property to give you an opportunity to repay what you owe.
Charging orders are a type of court order your creditor may apply for to secure your judgment debt against your home or any other property you own.
This means that, if you sell or remortgage your property before your outstanding balance has been repaid, any money made will go towards repaying your debt.
County Court Judgments are often the last opportunity you will have to repay your debt without it having a serious impact on your assets.
However, if you ignore a CCJ and owe more than £5,000, your creditor can initiate bankruptcy proceedings on your behalf, which may lead to you having to sell your belongings, including your home or car.
An Attachment of Earnings Order is when a creditor applies to the court to take the money they are owed directly from the debtor’s salary before they have the chance to access it.
The money will be sent directly to the court from your employer when you get paid (weekly or monthly) before being divided among your creditors.