What are CCJs and how do they affect my credit?
Do you have a County Court Judgement (CCJ) against you? Are you wondering how it will affect your credit? Or do you need more information on what a CCJ means? On this page we'll answer the questions you may have, and we'll also point you in the direction of some resources which may help you cope with your CCJ. And explain how you can begin building your credit back up. But first...
What is a CCJ?
If you owe a person or company money and haven't kept to the agreed repayments, they can take court action to get you to repay the debt if you do not respond to the company. If the court decides you are liable for the amount owed, they will issue a decision called a judgement against you. The judgement will tell you how much you need to pay in total. This could include the original debt, how to pay, when to pay, who to pay and any court costs and other fees. You’ll be notified of this in a Court Claim Form. At this stage, you do not have a CCJ against you. However, if you don’t respond to the Court Claim Form within 14 days, you’ll receive a CCJ by default.
What should I do if I receive a Court Claim Form?
You’ve got several options.
- If you don't believe you owe the amount claimed or even any money at all, you can choose to dispute the claim using the defense section of the Court Claim Form. It's best to seek independent advice before going down this route
- If you believe it's the creditor who owes you money instead, you can fill out the Counterclaim Form provided to make a claim against the creditor. Again, it's best to see independent advice if you want to counterclaim
- You can also choose to pay the debt claimed in full or ask the court to accept payment by installments
- You can find more information on the Government's website: https://www.gov.uk/county-court-judgments-ccj-for-debt
If you do not owe the money - cancel the judgment
If you do not owe the money, you can ask the court to cancel the CCJ. This is known as getting the judgment ‘set aside’. You can do this if you did not receive, or did not respond to, the original claim from the court saying you owed the money.
What does a CCJ mean and how does it affect me?
A CCJ can affect you in different ways. is the worry of having to deal with the court itself. Even though you don’t physically have to attend court it can be a stressful and upsetting experience. But a CCJ can also have a financial impact.
Also, you will of course have to pay the instalments as instructed by the court. Although you do owe the money this can be difficult to budget for. And if you do miss some payments your creditor could take further action against you. This could include bailiffs seizing your goods or an attachment of earnings order. This automatically deducts the money you owe from your wages.
There are a number of myths about CCJs and how they can affect you:
Myth 1: CCJs completely prevent you from obtaining any type of credit.
If you have met all of your obligations for at least six months after a CCJ has been issued, you may be able to get credit from a specialist lender. You can find out more from our CCJ recovery page.
Myth 2: CCJs are always automatically updated as "satisfied" when you have paid them.
When you have made your final repayment, you should apply in writing to the court to have the status of the CCJ updated.
Myth 3: CCJs will go away if you ignore them for six years.
Although normally debts cannot be enforced more than six years after the date they become due, your creditor can apply to the court to have it enforced even after this time. Additionally, you are likely to face further legal action if you fail to respond to a CCJ.
Myth 4: CCJs can be avoided by leaving the country.
Your creditor can apply for a European Enforcement Order if you're inside the EU, and similar arrangements exist with countries outside the EU.
Myth 5: CCJs do not affect people of all economic backgrounds.
Although, statistically, individuals on lower incomes are more likely to have a CCJ registered against them, business owners can also be targeted by CCJs if for example they fail to pay a supplier.
Finally, applying for credit when a CCJ has been registered against your credit file can impact the likelihood of being obtaining credit. The Official Statutory Register of Judgments lists all CCJs. It’s a public record which means anyone can view it. Finance companies will search the register when you apply for credit. And a CCJ registered against your name could seriously impact your ability to get credit. This could make it difficult for you to take out a loan or rent a home for example. You may also struggle to get a mobile phone contract or switch energy supplier. So, a CCJ can have a big impact on you.
If you pay the full amount within one month of the judgement the CCJ won't appear on your credit file. Otherwise it will stay on your file for six years. Even if you paid the CCJ in full before the end of the six-year period it will remain on your file. However, once paid it will be marked as ‘satisfied’. This tells lenders you no longer owe the debt.
How do I know if I have a CCJ?
If you're not sure if there's a CCJ against you it's easy to check. You can search the Registry Trust's online database. This will search the Official Statutory Register of Judgments we mentioned earlier. If there's a CCJ against you the search will flag this up. But there is a small fee for doing this, usually between £6-£10.
An easier and cheaper way to check for CCJs is to download your credit report. There are many free websites that allow you to view your full credit report. This includes checking for CCJ’s.
A CCJ can sometimes feel like the end of the world. Especially when a judgement you’d almost forgotten about stops you getting credit. But don’t worry. You don’t have to wait until the CCJ drops off your file to apply for credit.
Because of the large sums needed to buy a property it's highly unlikely a lender will give you a mortgage if you have a CCJ. This is because they’ll see you as too high a risk. However, CCJs aren't necessarily a barrier to you obtaining other forms of credit. Yes, the high street banks and traditional lenders may not approve you for credit but specialist lenders like Vanquis can be more flexible.
If you have a CCJ you can still apply for a Vanquis credit card. Our eligibility checker will tell you if you’re eligible before you apply. And the doubly good news is that once you start using your Vanquis card and paying your monthly instalments, you’ll begin building your credit.
How to pay a CCJ
When the CCJ is issued you must repay the money the court says you owe. But don’t send your payments directly to the court. You pay the business or person you owe the debt to. Sometimes you pay the solicitor. Some businesses, like the water companies for example, may send you a book of paying in slips you can use at the post office. Others will accept payments through bank transfer or direct debit. But whatever you do don’t send cash in the post. There’s too much risk of it going missing. And whichever payment arrangements you make you must always keep a receipt.
If you’re paying instalments and find you’re struggling to come up with the cash every month you can apply to change the amount you pay. You need to complete an N245 form. But you may have to pay a fee to the court.
On the form you should note all your expenses and income and then say how much you wish to pay. However, you need to be realistic in the amount you propose. The court will then decide if they will change the amount you have to pay. But make sure you keep paying at the current rate until you hear the court’s decision.
What happens if I don’t pay a CCJ?
If you find you’re unable to pay a CCJ you must take action. The first step is to contact your creditor directly. Explain you’re having difficulty and ask them to reduce the payments. Alternatively complete the N245 form mentioned above.
Ultimately, if you don’t pay a CCJ your creditor may ask the court for a warrant to send bailiffs to your home. Before the bailiffs can call the court will give you seven days to pay the debt in full. If you’re unable to pay you can ask the court to suspend the bailiff action by submitting the N245 form. At this point you can make another request to have your instalments reduced.
If you’re having financial issues don’t panic. Help is always available. You can find further advice here.
It’s sometimes possible to remove a CCJ other than waiting six years for it to fall off your credit file. If you have a default judgment against you, you may be able to get it "set aside". This temporarily removes the CCJ. The court may then listen to your side of things before deciding how to proceed. However, do think very carefully before taking this action.
Applying to have a judgment set aside involves a court fee of over £200. You also need a valid reason to get a default judgment set aside. For example, this could be that you didn't receive the forms, or you weren’t living at your address when they arrived. But, you'll need to prove this to the court. Be aware there's no guarantee the court will accept your version of events.
You can also apply to the credit reference agencies to remove the CCJ from your credit record. They will have conditions, but if you meet these they may remove the CCJ from your record.
What’s next for me?
As mentioned before, a CCJ isn’t the end of the world. There are specialist lenders who often work with people who have CCJs. You can still apply for a Vanquis credit card if you have a CCJ.