In England a CCJ or County Court Judgment is an order by the court for you to repay an amount of money you owe to a creditor.
A CCJ is usually used as a last resort when a creditor has been unable to agree a repayment of a debt. A CCJ will be entered in order to get payment from you where other methods are not suitable or have failed.
What happens when you get a CCJ?
The initial process would involve you being sent an Admission form and a Defence Form. You would also receive a form detailing the amount owed, the court issuing the claim and the details of the creditor.
Basically the admission form gives you the opportunity to acknowledge that you owe the debt as well as asking for information about your financial situation. The defence form is used when you dispute the amount owed.
The admission form allows you to make an offer of repayment which you can realistically afford on a monthly basis.
In the event that you have been asked to repay the amount in full, you can apply to the court to vary the order so that you can make a payment you can afford on a monthly basis. You would normally do this by filling in a N245 form.
This form is available in the County Court or you can also find it online. Going through this process would normally cost around £30. However if you are on a low-income, this fee can sometimes be waived.
What effect does a CCJ have on your Credit Report?
A CCJ is not a good thing to have on your Credit Report and will make obtaining Credit extremely difficult. Even if you do manage to get Credit, you will pay a lot more interest than someone with a good credit score.
The chances are though that if you have a CCJ, you are probably not looking to get any more Credit.
If you pay a CCJ within one month, then you can apply for a certificate of cancellation or satisfaction. You do this by completing form N441A. There is a cost which at the time of writing is £15.
If you are paying your debt over a period of time, once the CCJ has been settled within the six-year period, you can apply to the court for a Certificate of Satisfaction. This certificate normally costs £15 at the time of writing.
A CCJ is registered on your Credit File for six years and is seen by lenders when you make an application for Credit. It is not a good thing to have and will make obtaining credit very difficult.
If you have a CCJ and need help then please visit the Debt Help section of this blog to get started.