Any unsecured debts which have not been paid by the terms of the original contract/ agreement could be lead to a CCJ. You could also be issued a CCJ due to non-payment of debt owed to individuals or a business.
There are a number of CCJ disadvantages such as the effect on your credit rating. Any adverse credit history may have an effect on your ability to secure credit in the future. If you do not pay the CCJ then further action can be taken against you, such as the debt being secured against your home or Court bailiffs being sent to seize your possessions.
CCJ stands for County Court Judgment.
Anyone can be issued a CCJ if they have not maintained repayment of a debt at a previously agreed rate.
The amount that you will have to pay will be set by the court. You will usually have to make this payment to the creditor who is owed the debt or the debt collection agency that is pursuing the claim.
As long as you pay the agreed amounts towards your CCJ, then you should not have to worry about house repossession. However, if you fail to keep to the agreed repayments your creditor can apply to the court to enforce the Judgment by way of a Charging Order. This means that the unsecured debt will become secured against your home, and failure to keep up repayments could mean that you risk being issued with an Order for Sale.
The CCJ will appear on your credit file for six years from the date of Judgment. For a small fee you can carry out a search of the Register of Judgments, Orders and Fines.
The CCJ will remain on your credit file for six years but a CCJ alone will not mean that you are refused credit. Your credit rating may already be affected, as a CCJ means that you have not paid the contractual repayments to your creditor. This will show on your credit file, making it more difficult to get accepted for credit.
CCJs are marked as ‘satisfied’ when the debt is paid off during the six years. However, potential lenders will still know that you had a CCJ issued against you, meaning that you are seen as more of a lending risk.
Yes. If you do not make payments then your creditor can go back to court to apply for further enforcement action to be taken against you, such as issuing a Charging Order against your home, getting the debt deducted directly from your wages, or bailiff action.
If you cannot afford to make payments to your CCJ then you should apply to Court to see if you can get the payments amount changed. Ask your local County Court for an ‘Application to Vary an Order’ (N245). Please note that there may be a charge for this service.