Worried about CCJ debt? Here’s what you can do
Almost 300,000 people got a County Court Judgement (CCJ) for missing debt repayments in the first three months of this year. This was a 10-year quarterly high for CCJ debt.
The figures also represented a 35% increase in CCJs on the same period last year.
It can be scary to get a CCJ as it’s a legal process that involves the courts. And if you don’t know what to expect, it’s only natural to be worried. That’s why we’re taking you through everything you need to know about CCJs, so you won’t need to panic if it happens to you.
What is a CCJ?
A County Court Judgement (CCJ) is when a creditor passes a debt to the courts. This can happen if you’ve missed repayments on the money you owe.
Creditors won’t ever issue a CCJ as the first action if you’re struggling to pay a debt. They’ll only do this after they’ve issued court proceedings. You’ll then have at least 14 days to respond to this. You can either admit the debt and set up a payment plan, or dispute that you owe it at all. And if you don’t respond within the 14 days, you’ll get a CCJ in default.
A CCJ debt means that the courts will give you a schedule of how much you’ve got to pay and when, until you’ve paid it all back. You can negotiate on this, depending on how much you can afford to pay each month.
If you want to know more about the CCJ process in depth, we’ve got a handy CCJ guide.
How will a CCJ affect your credit rating?
A CCJ will affect your credit score for six years after you get it. This can mean that some lenders might be more likely to turn you down if you apply to borrow money. But each lender has its own set of criteria for deciding whether to accept you or not – so don’t assume they’ll automatically say no.
If you pay the CCJ debt within a month of getting it, it will show as ‘satisfied’ on your credit report. Lenders might look more favourably on this, although some might still see it as a negative.
Can you add a CCJ into a DMP?
If you get a Debt Management Plan (DMP), you won’t be able to add a CCJ debt into it. This is because a CCJ is a formal agreement with the courts and a DMP is an informal debt solution.
So if you’re looking at starting a DMP and you’ve got a CCJ, one option is to leave this debt out of your plan. Your creditors would see this on your Income and Expenditure form when you applied. Depending on how much it reduced what you could pay them, they might not accept this.
Can you get a CCJ when you’re in a DMP?
As a DMP isn’t a legally binding agreement, your creditors are able to apply for a CCJ even when your plan has started. However, lenders might be less likely to do this than if you weren’t paying anything to them.
When you start a plan with Harrington Brooks, we’ll speak to your creditors on your behalf. There’s no guarantee that this means that creditors won’t apply for a CCJ, but the fact you’re paying a regular amount towards your debts should hopefully mean they won’t take legal action.
Can you add a CCJ into an IVA?
An Individual Voluntary Arrangement (IVA) is a formal, legally binding debt solution. Because of this, you can add any CCJ debts into it.
If you do this, you’ll stop making payments towards your CCJ once your IVA is in place. And while your IVA is running, creditors won’t be able to apply for any more CCJs against you.
What should you do if you get a CCJ debt?
If a lender applies for a CCJ against you, first check whether you actually owe the money. If you don’t, you can apply to get the judgement ‘set aside’. This means the court will cancel the CCJ. You can find out how to do this on the Gov.uk website.
But if you do owe the money, you should organise paying this back. The court will send you a judgement form telling you to pay the CCJ debt in instalments or in full. For more information about how to do this, check out the Gov.uk site.