As a business owner, having a County Court Judgment (CCJ) registered against you can be stressful. If you do not deal with the judgment promptly and in the correct manner, the CCJ could impact your credit score and your ability to finance your business.
We’ve put together this high-level guide of suggested actions you can take if you have a CCJ registered against you.
Contents:
What is a CCJ and what happens when one is entered against me?
A CCJ is a form of court order that is issued by the County Court. In practical terms, a judgment has been registered against you as a result of an individual or business who believes you owe them money issuing a legal claim.
Sometimes a CCJ can be issued against you “in default”. This is where the merits of the case have not yet been considered by a court but a judgment has been registered because you have failed to respond to the claim that has been issued against you.
The Register of Judgments, Orders and Fines and the credit file
Once the court has entered the CCJ against you, it is recorded on a public register known as The Register of Judgment, Orders and Fines. The next stage is that the information about the judgment is passed on to credit reference agencies, who will then record the judgment on your credit file. This is what affects your credit rating and can consequently make it difficult for you to get credit against future purchases or to borrow money.
Why would a creditor apply for a CCJ against me?
A creditor could apply for a CCJ “in default” if they have issued a claim against you but you have not responded within the required time period. This can come as a shock if you were not aware of any claim issued against you.
How to remove a CCJ
If you cannot or do not dispute that you owe the money, you can pay the debt in full within one calendar month from the date that the CCJ was entered (this date will be on the court document itself). If you do so, the CCJ will be cancelled and removed from your credit file: this means that if you own a limited company there will not be a financial impact on the business or upon you personally.
How long does a CCJ last?
If one calendar month elapses and you haven’t paid the judgment debt, the unpaid CCJ will stay on your credit file for 6 years and will be removed once the 6-year time frame has elapsed. If you settle the debt after one calendar month but within the remainder of the 6-year time period, the CCJ will be marked as ‘satisfied’ – but it will still show on your credit file. In order to get a paid CCJ marked as satisfied, you would need to provide evidence of payment to the court and you can also apply to the court for a Certificate of Satisfaction.
What happens if I don't pay a CCJ?
If you don’t pay the CCJ debt and you ignore it, it’s open to the creditor to take enforcement action against you and furthermore, they are at liberty to do so as soon as the date specified for payment on the CCJ court order document has elapsed. Usually, a judgment debt has to be paid within a calendar month of the date of judgment (as touched upon above), unless the court has ordered that the debt should be paid via instalments – in which case enforcement action can technically begin once any instalments are missed.
What to do if you have a CCJ but you don't know who it is from
In the event that you become aware of a CCJ and you had no prior knowledge of it, you should act quickly to gather information as soon as possible and follow the guidance set out below:
- Obtain a copy of your credit report if you have no details of the CCJ: This is easily done by using a service such as Experian. Viewing your credit report will enable you to identify what the judgment debt relates to, when it was obtained, the amount currently owing, and should also specify which County Court was involved and set out a unique reference number (the ‘Claim Number’). Once you have this information, you can locate the details for the relevant County Court on the gov.uk website and contact them for a copy of the CCJ court order.
- Ascertain the reason why you were unaware of the CCJ: This step is crucial because it could make a big difference to what happens next. If it transpires that the court proceedings/documents were sent to you at the wrong address or there was some other technical error in serving the docuements on you (meaning that they were ‘incorrectly served’ upon you), then you have the right to apply to the court to have the CCJ set aside as a result of this procedural defect. Before doing so, the creditor (or their solicitor, if one is noted on the court documents as representing the creditor) may consent to the judgment being set aside if they accept there may have been an error in serving the documents.
- If consent to set aside the CCJ is obtained from the creditor or their solicitors – which should be given if there was a clear and straightforward procedural defect – an application form and a consent order can be filed with the court, who should then set aside the CCJ.
- If the creditor or their solicitor will not consent to setting aside the CCJ or there is not an obvious procedural defect with service of the court proceedings upon you, or you believe you don’t owe the debt in the first place, then the situation is less straightforward. The onus will be on you to apply to the court to have the CCJ set aside. In order to try and persuade them to do this you will need to make a formal application to the court setting out the reasons why you were unaware of the court proceedings/the CCJ and that you have a reasonably viable defence to the claim which you should be allowed to pursue. You will be expected to provide evidence in support of your reasons and then a judge will review the application, more often than not listing a hearing where both sides will be expected to attend and where the judge will decide whether or not the CCJ should be set aside. Our handy guide to setting aside a default judgment will help you to understand this process.
- If, after the relevant steps in the bullet points above that applies to your scenario have been followed, the court decides that the CCJ should be set aside, the judgment will be removed from your credit file – but the case will still remain live and it’s important that you seek legal advice if necessary at this point.
How can Harper James help business owners with a CCJ?
As soon as you contact our business dispute solicitors, we can advise you on whether or not you have a reasonable basis on which to apply to side aside a CCJ. We can then make the application or assist you in doing so.
You should obtain legal advice as soon as you become aware of a CCJ, as how quickly you respond to the CCJ is likely to be a factor in whether it will affect your credit score or whether any application to set it aside is successful.
Please note that as a commercial law firm, we only assist business owners and shareholders with CCJ disputes.
Summary
A CCJ is a serious matter for business owners. A CCJ should be addressed promptly, either by payment (where it’s accepted that the debt is owed) or by taking steps to have the judgment set aside if there was a procedural defect with service or some other good reason why you were unaware of the judgment/believe that you do not owe the money. Because of the serious nature of a CCJ on your personal and business finances, it’s advisable to seek advice from a specialist business disputes lawyer if you are unsure about any aspect of the process.
