What is a CCJ?
CCJ stands for County Court Judgement. This is a form of court order that lenders can apply for if they think you aren’t going to pay back money owed.
If you are sent a CCJ, it means the court has agreed with the lender that you have to pay back the debt in question. It will usually be posted to you and give you the option to:
- Dispute the amount or the debt itself
- Clear the debt in full
- Pay back what you owe in instalments
- Put in a claim against the creditor (if you think you have been treated unfairly)
CCJs are only issued in England, Wales and Northern Ireland – in Scotland a different method is used called ‘enforcing a debt by diligence’. A marker is also put on your credit report, which will bring your credit score down and make getting credit a whole lot harder.
It’s important not to ignore a CCJ if you get one. Doing this can lead to serious action and you may end up with the bailiffs coming to your door.
How long does a CCJ last?
Once a CCJ has been noted on your credit file, it will stay there for six years – even if it has been paid off. It will also be noted on the Register of Judgements, Orders and Fines for the same amount of time. After the six years have passed, it will then drop off altogether.
Can a CCJ be removed?
If you clear the CCJ within a month of receiving it, you can apply to have it removed from both the register and your credit report. To do this, you’ll need to apply to the county court that sent you for a certificate of cancellation.
You’ll need to send proof that you have paid the CCJ and pay a £15 court fee to submit the application. However, if you have little income you may be able to do it for free.
Once you’ve done this, the court will contact the register to have the record of your CCJ removed. You can then get it removed from your credit file by sending the credit reference agencies a copy of your cancellation certificate.
If you clear the CCJ more than a month after receiving it, you won’t be able to get it removed, but you can apply for a certificate of satisfaction. This works the same as above and can help you when applying for credit whilst it’s still showing on your report.
Can you get a mortgage with a CCJ?
Lenders will look at your entire credit history when applying for a mortgage, so having a CCJ on your file will limit your options. However, it doesn’t mean you’ll be rejected altogether.
If you’ve had a clear history since paying off the CCJ, then this increases your chances of being approved. But if you have any active CCJs or defaults, then this won’t go in your favour as it will look like you are struggling with finances.
There are some lenders out there who will give you a mortgage even with a CCJ, but you’ll likely be charged higher interest rates in these cases.
What happens if I don’t pay a CCJ?
If you receive a CCJ and don’t do anything about it, it can lead to more serious action. The lender can ask the court to take it further and take steps to enforce the debt.
One of the common ways to do this is to send bailiffs to then collect the debt on the lender and the court’s behalf. The court will grant a Warrant of Execution, which means that the bailiffs they send will have the power to come to your home – where they will either collect payment or take your belongings to be sold as repayment of the debt.
It’s also possible for the court to grant a charging order. This is usually against homeowners and can lead to your home being taken from you if you don’t pay the debt in question.
In some cases, they can apply for an attachment of earnings to have payments taken directly from your wages. This will be taken before your pay even hits your bank and can often cause you further money problems.
What should I do if I get a CJJ?
It’s hard to know what to do when a CCJ letter/notice comes through your letterbox, and we always advise to seek advice before doing anything. You’ll usually have been sent a notice of default or arrears before a CCJ is sent, and it’s only if you have chosen to ignore it that legal action is usually taken.
If it’s a debt that falls under the Consumer Credit Act, the lender has to give you 14 days after sending the default notice before they can take any further action.
Once you have received the judgment, seek advice from the court or a debt advice service to help you respond to the CCJ. This can help you to make sure that the court takes your situation into consideration before deciding how you’re going to pay back what you owe.
If you choose not to respond to the letter/notice, then the CCJ will still be sent but you’ll likely be asked to pay it back in a way that you can’t afford. You only have 14 days to respond from when you receive the notice, so it’s best to respond as soon as possible.