If you have an unpaid debt you are struggling to pay, your creditor (the individual or business you owe money to) might issue a County Court Judgment (CCJ) against you.
Finding out your creditor has taken court action against you for a debt can be scary but knowing what to expect can help put your mind at ease.
This guide will cover everything you need to know about the CCJ enforcement process, from what a CCJ is to how you can get a CCJ set aside.
What is a CCJ?
A County Court Judgment is a type of court order that your creditor might issue against you if you fail to make agreed repayments on a debt.
In Scotland, County Court Judgments are known as Decrees.
A CCJ can be enforced by a High Court Enforcement Officer (HCEO) or County Court bailiff but County Court bailiffs usually only recover debts of less than £600.
CCJs over £600 (including court costs) can be enforced by High Court Enforcement Officers.
If your creditor has reason to believe you have enough money to cover the debt but you are choosing to ignore it, they can apply for a Third-Party Debt Order.
Third-Party Debt Orders give creditors the power to take money directly from where the money is being kept (usually a debtor’s bank account or building society).
Why have I received a CCJ?
If you have received a CCJ, it means your creditor has attempted to recover the money they are owed through other means but has been unsuccessful and has now left it in the hands of the court.
Most creditors will try to come to an agreement with you over how to repay the debt before resorting to court action.
If you don’t respond or fail to cooperate, they are free to escalate the case to court.
However, receiving a CCJ should never come as a shock. Before applying to the court for a CCJ, creditors must always issue a default notice, which is a final warning encouraging you to pay.
How does the CCJ enforcement process work?
Knowing how the CCJ enforcement process works can help you know exactly what to expect at every step of the way.
The process can differ slightly between courts but usually includes the same set of steps.
Letter of claim
Before your creditor can start CCJ proceedings, they should try to come to an agreement with you by sending you a letter of claim.
This is a letter outlining your options should you want to avoid court action.
Failure to respond to a letter of claim within 30 days will give your creditor the right to issue a default notice.
If you have been unable to come to an agreement or didn’t respond to the letter of claim within 30 days, your creditor can serve you with a default notice.
This is a letter warning you that legal action will begin if you don’t repay what you owe.
For credit agreements regulated by the Consumer Credit Act, you must be sent a default notice a minimum of 14 days before legal action.
You must never ignore a default notice. If you don’t know how to respond, seek expert help before the deadline.
If, for whatever reason, you have failed to come to an agreement or you haven’t responded to previous requests, your creditor will issue you with a County Court claim form.
This gives you an opportunity to explain your circumstances and how you plan to repay the money you owe.
If you respond with your income, living costs, and how much you’re willing to repay each month, the court will take this into account.
If you don’t respond to the County Court claim form within 14 days, the CCJ will still go ahead but your repayments won’t be based on your financial situation and you could be forced to make monthly repayments you can’t afford. This is known as a ‘judgment by default’.
Once the court has reviewed the paperwork, they will issue the CCJ. The court will decide if you must repay the debt in instalments (where you make monthly payments) or forthwith (where the total amount is due immediately).
If you’ve admitted you owe the money and have stated how much you’re willing to pay each month, the court will usually allow you to repay the debt in instalments based on how much you can afford. If your repayments are more than you can comfortably afford, you can ask the court to reassess its decision. This is called a redetermination.
Your creditor might also ask the court for information about your finances. This is known as an ‘order to obtain information’ and, in some cases, will require you to attend court.
If the debtor owns property, the creditor can also apply for a charging order once the judgment has been issued. This secures the unpaid debt against their home.
Can I get a CCJ set aside?
If you don’t believe you owe the money, you can apply to get a CCJ set aside (cancelled). When a CCJ is set aside, it is also removed from your credit file.
However, the court will only agree to set aside a CCJ if it was:
- Entered in error
- Paid before the court date
- Cancelled because the full payment was made within one month of receiving the judgment
To apply to get a CCJ set aside, you must fill in an application notice (N244 form) and send it to the court. This requires a court fee of £275 but payment doesn’t guarantee the CCJ will be set aside. This is why you must only apply to get a CCJ set aside if you have a good reason why you shouldn’t pay it and are confident your application will be upheld by the court.
It is also worth remembering that setting aside a CCJ simply means the judgment is cancelled, not that the debt disappears. You will be put back in the same position you were in before the judgment and your creditor will be free to take further legal action if they wish.
Being aware of the CCJ enforcement process and understanding one’s rights and obligations as a debtor can help individuals navigate the situation more confidently.
Seeking professional advice and responding promptly to correspondence from creditors and the court are essential steps in managing a CCJ effectively.