There is plenty of misinformation out there, about County Court Judgments and the consequences. We feel it's important to expose these myths so that people aren't encouraged to take reckless actions, while also assuring those who are intimidated by the system that there is a way to resolve the problems, and a route back to a strong credit file.
Here, we find out the truth behind some of the most common CCJ myths.
Myth 1 If you are issued a County Court Judgment, it is impossible to get credit...
While it is true that the 'regular' card providers are more likely to turn you down if a CCJ is on your credit file (and rejections will only further harm your credit outlook), specialist lenders like Vanquis regularly deal with those who have one or more CCJs in their credit history. While your circumstances are taken into account, within the first six months of an unsatisfied CCJ you may find it difficult to get credit from anyone. After a minimum of six months of showing you have been meeting all financial obligations (or after you’ve satisfied any CCJs), it should be easier to get credit with a specialist lender. In fact, borrowing responsibly and regularly meeting credit card bill payments can actually help rebuild your credit rating after a CCJ. If you'd like to find out more about this, take a look at our FAQs or our CCJ process chart and recovery tips.
Myth 2 A County Court Judgment paid in full is automatically 'satisfied'...
As detailed at length in the other sections in our help guide, unless you pay the full amount of a CCJ within a month, your debt will be recorded on the Register of Judgments, Orders and Fines. Your credit history will then show that you have had a CCJ against your name, and this will remain for a period of six years. Until paid, this will be listed as 'unsatisfied'. A 'satisfied' debt has been paid in full, however, as the register exists outside the actual mechanisms of repayment, its status will only be updated if those running the CCJ register have been told.
Since April 2006, a court provided with evidence of full payment is obliged to amend the register. So if you have satisfied a CCJ you can apply in writing to the court that last heard your case for a certificate. You should never assume that your payment has been reflected on the register, and it is in your best interest to have your CCJ listed as ‘satisfied’ sooner rather than later, for the sake of your credit rating.
County Court Judgments only affect people with low incomes...
There is a tendency to make sweeping statements about various groups when considering money troubles, but the data doesn't always back them up. The Registry Trust's Annual Review for 2012 has interesting data regarding how affluence relates to exposure to CCJs, and while the current picture is that, yes, less affluent people are receiving the majority of judgments; you only have to look to the years before the global recession to see a dramatically different picture.
From 2001 to 2005, the majority of CCJs were being obtained against those in the 'Highest' and 'High' affluence bands. The Registry Trust has suggested that "This may demonstrate that during this period creditors focused on the potential for households to pay." So, in other words, CCJs affect people from all kinds of financial backgrounds.
If I ignore the debt for six years, it will go away...
Obviously, ignoring your debt and hoping it will go away is never to be advised. However, there have been situations where people have evaded CCJ-backed debts for six years and assume that they are now safe from the obligation to make payment.
This is because the Limitation Act of 1980 provides that debts cannot be enforced more than six years after the date upon which they became due (unless the debt has been acknowledged or any payment towards it made in that period): in other words, they become 'statute barred'. However, where a CCJ has been issued, a debt does not become statute barred in this way. To enforce the CCJ after six years, it would, however, need the permission of the court.
So, it's clear that ignoring a CCJ is not a viable option, and is likely to only make your situation worse. If you have been issued a CCJ and are struggling to meet the required payments, get in touch with the Court as soon as possible.
If I go abroad, I can avoid paying a County Court Judgment...
One supposed method of dodging a CCJ (and debt more generally) is to leave the country, but this doesn't mean that there aren’t plenty of avenues open to somebody who wishes to pursue you outside the country. For example, the creditor could apply for a European enforcement order if you’re inside the EU. Outside the EU, the UK has many similar arrangements with other countries that can allow enforcement. Delaying the inevitable is likely to cause more problems. As with the previous myth, there are no quick fixes and ignoring the facts will only make things worse.
It is perhaps also worth noting here that there are only two ways to have a CCJ removed from the register before the six year limit: to pay it back in full within a month of the CCJ being issued or to have the judgment set aside, which is not so easy if you have simply ignored the claim (for more information on what this means, take a look at our FAQs). Given this, any credit repair companies that claim to be able to 'legally remove' CCJs from the register for a fee are to be avoided.
If you have satisfied your CCJ and would like to apply for a Vanquis Credit Card, click here.